Monetary Policy Committee

Lord Barnett: asked Her Majesty's Government:
	What criteria are used for the appointment of external members of the Monetary Policy Committee of the Bank of England.

Lord McKenzie of Luton: My Lords, Section 13(4) of the Bank of England Act 1998 states that the four external members of the Monetary Policy Committee shall be appointed by the Chancellor only if he is satisfied that the person has knowledge or experience which is likely to be relevant to the committee's functions.

Lord Barnett: My Lords, I assume that that means that the Chancellor must like him or her. In making the decision, does the Chancellor have discussions with the Governor of the Bank of England? If so, what do they talk about? Does he try to influence whether the person is one who might increase or decrease interest rates? If he does not discuss that, can we take it that they discuss something at their regular monthly meetings? If they do not discuss that, is it because the Chancellor never seeks in any way to influence the changes in interest rates decided by the Monetary Policy Committee?

Lord McKenzie of Luton: My Lords, I am not privy to what happens at monthly meetings between the Governor of the Bank of England and the Chancellor. I am a little surprised that my noble friend should be perhaps a little disgruntled at the arrangements surrounding the Monetary Policy Committee, because independence of the Bank of England and the institutional arrangements have been spectacularly successful in helping to guide the UK economy. As for the Chancellor influencing the committee's composition and the outcome of its decisions, I firmly reject that. It is hugely important to the process that the credibility and integrity of the MPC is maintained. That has been recognised internationally by the OECD and others.

Lord Newby: My Lords, does the Minister agree that the openness of the system would be improved if the Chancellor fulfilled the Nolan principles when making appointments to the MPC—in particular, if the appointments were advertised? The problem at the moment is that the Chancellor often gives the impression, even if it is not the reality, that he just rings up a chum.

Lord McKenzie of Luton: My Lords, if that impression is given, it does not accord with reality. The difficulty in making these appointments is that they are highly market-sensitive and the procedures adopted for other public appointments are therefore not appropriate in this case. Imagine what might happen if a timetable were issued with a process of advertisement. There would be endless speculation about who is in, who is out; who has applied and who has not; is it the doves or the hawks? There is no doubt that that would feed into the market. It is vital that market interest rates should reflect economic fundamentals, not rumour, speculation and perception.

Baroness Noakes: My Lords, we on these Benches understand why the appointment of the Governor of the Bank of England might be market sensitive, but we do not understand why the appointment of any of the other eight members of the MPC might be market sensitive. What evidence does the Treasury have to suggest that these appointments have the power to move markets?

Lord McKenzie of Luton: My Lords, I do not have the cuttings with me, but recent press reports relating only to a change itself gave rise to speculation about what had been happening between the so-called doves and hawks on the Monetary Policy Committee. These things do influence markets. It may be inevitable that one can never extinguish that entirely, but taking steps to ensure that it is not exacerbated by the appointments process is absolutely vital.

Lord Peston: My Lords, I chaired the Economic Affairs Committee, which vigorously opposed the Treasury's approach to this matter and argued forcefully that we ought to follow the Nolan rules. Indeed, we believed that the Treasury, as the most important department of state, ought to have given a lead on this. What is it about the availability of economists in this country that the Treasury is under the impression that only those from the Oxford, Cambridge and London nexus are worthy to be members of the Monetary Policy Committee? Does my noble friend not know that there are vast numbers of first-class universities in this country containing outstandingly good economists? I live for the day when someone from north of the south-east triangle might be appointed to that committee.

Lord McKenzie of Luton: My Lords, I am sure that the Government recognise, as do I, that there are many distinguished economists in the UK, including my noble friend. What is important is that those who are appointed have the relevant expertise. This matter is tested because the Treasury Select Committee in another place has held some 22 appointment hearings since 1998. On each occasion it has endorsed the appointments that have been made, with only one exception back in 2000 where a query arose. Indeed, the decisions of the Treasury Select Committee in another place have been unanimous. They have had all-party support.

Lord McNally: My Lords, in view of what the Minister said about the qualifications needed, including the suggestion that someone from north of Watford be appointed, does not the name Lord Barnett cry out? I suggest this particularly if we couple with his qualifications the noble Lord's record of tabling unswervingly helpful Questions to the Government Front Bench.

Lord McKenzie of Luton: My Lords, the experience and expertise of my noble friend Lord Barnett are well recognised beyond the bounds of the Treasury and the Bank of England. However, like the noble Lord, Lord McNally, I would be distraught if my noble friend took up a post which precluded him being able to be regularly in his place in order to ask such interesting questions.

Lord Roberts of Conwy: My Lords, are any reports on these appointees given to the Chancellor after their appointment, and if so, by whom?

Lord McKenzie of Luton: My Lords, the Chancellor is directly involved in making the appointments of external members, but the names of the people who are considered for appointment remain confidential for reasons which noble Lords will understand. However, I repeat that those who are appointed are routinely questioned by the Treasury Select Committee in another place.

Lord Sheldon: My Lords, should not the Governor be congratulated on his ability to be in the minority during the monthly meeting when interest rates are assessed, and to be able to take that position when it might be thought of as a disadvantage? It demonstrates clearly the level of independence that the Governor has brought to his office.

Lord McKenzie of Luton: My Lords, that is absolutely right, although I think it has happened on only one occasion, certainly on checking the voting records over the past 12 months. Indeed, when we look at both the external and internal appointments, it is clear that the members do not vote in blocks in the same way. They vote differentially and have done so over the period.
	In relation to the whole question here, I would ultimately pray in aid the report of the OECD Economic Survey. It states:
	"The framework governing monetary policy and fiscal policy has played a key role in improving macroeconomic stability relative both to the past and to other OECD countries. The United Kingdom is a leader in the quality of its monetary and fiscal policy frameworks among OECD countries and the principles and features of its framework have been scrutinised by other countries with a view to implementation in a different institutional context".

Electrical Systems Technical Issues Steering Group

Lord Jenkin of Roding: asked Her Majesty's Government:
	When they now expect to publish the report of the joint industry/government electricity system issues steering group on grid operation with increasing wind generation.

Lord Sainsbury of Turville: My Lords, the Electrical Systems Technical Issues Steering Group is looking at the performance of the GB electrical network post-2010. Its interim report will be published by the end of November. A copy of the report will be placed in the Library of the House.

Lord Jenkin of Roding: My Lords, why is this taking so long? It was in July 2004 that the Select Committee of this House drew the Government's attention to the fact that the intermittency of wind power makes it subject to the law of diminishing returns: the more wind power you install above a low limit, the less conventional power is displaced and the more unstable the grid becomes. Given that the problems faced in Denmark and Germany arise from precisely the phenomenon of the law of diminishing returns, is it not time for the Government to give the Select Committee a response to its warning?

Lord Sainsbury of Turville: My Lords, we had hoped to produce the report earlier, but it has been necessary to provide additional resources to the National Grid electricity transmission company. The interim report has now been produced and it will be sent to the Minister next week. The House will therefore be able to see the group's recommendations soon.

Lord Redesdale: My Lords, following on from the question asked by the noble Lord, Lord Jenkin of Roding, does the Minister agree that the National Grid standby is calculated on the largest provider of electricity, which is Sellafield, and that until wind power matches about 20 per cent of the National Grid, it is irrelevant whether it is subject to diminishing returns? Does he further agree that, given the large amount of energy that is being taken up to match Sellafield's output, the Government should consider dismantling the National Grid and turning to localised networks?

Lord Sainsbury of Turville: My Lords, the report does not look at diminishing returns. It looks at the stability of the system. Until one approaches the 20 per cent level, this is probably not an issue, as has been shown in other countries. That is what the report is looking at. Interestingly, it has already been shown that if we get the turbine designs right, the performance of the system could be increased rather than diminished by having more wind.

Lord Lewis of Newnham: My Lords, what effect will the delays have on the investigated changes in the charging and contractual regime, proposed by Ofgem, to cope with the growing number of renewable generation projects? I believe that the report will be published in 2006 but there seems to be some disparity of date.

Lord Sainsbury of Turville: My Lords, as I pointed out, the report looks at the dynamic performance of the system after 2010. It does not look at current charging issues.

Baroness Miller of Hendon: My Lords, without anticipating the report, which is taking an inordinately long time to come to fruition, is the Minister able to say how close it is coming to previous predictions about the contribution that intermittent wind will make to our power needs by 2010?

Lord Sainsbury of Turville: My Lords, again, I point out that while scenarios are being produced so that we can look at the performance under different circumstances, the report specifically looks at the dynamic performance and whether unstable situations are produced if wind and gas are increased as a proportion of the system. The report suggests that if the turbine designs are right, there can be a dampening-down of systems oscillations and a riding through of transmission faults, which would improve the system.

Palliative Care

The Earl of Dundee: asked Her Majesty's Government:
	What plans they have to fulfil their commitment to double investment in palliative care services.

Lord Warner: My Lords, the details of delivering our manifesto commitment are being discussed with a range of key stakeholders. Alongside this, the views of the public, service users and staff on end-of-life care is one of the issues covered in the Your health, your care, your say consultation process at present in progress. We will be taking account of what people have to say in this consultation in the way we discharge our manifesto commitment.

The Earl of Dundee: My Lords, I thank the Minister for his reply. Does he accept that government funding of adult hospices, at 34 per cent, and of those for children, at only 4 per cent, makes hospices the largest fund-raising cause in the United Kingdom? Which improved percentages of public funding for adult and children hospices will therefore be achieved when the Government fulfil their commitment to double investment in palliative care services?

Lord Warner: My Lords, I fully accept the tremendous contribution made to health and social care services by the voluntary sector in the hospice movement, both in adult and children services. That is strongly supported by the Government, who, as the noble Earl knows, continue to put extra money into palliative care. About half of the extra £50 million we have put in recently went to the voluntary sector in this area. It was made very clear that our manifesto commitment was about increasing opportunities for people to be treated at home, not in other services. Clearly the hospice movement will have some contribution to make in that area.

Lord Ashley of Stoke: My Lords, the Government's commitment to doubling investment in palliative care is, of course, welcome. But, given the fact that only some 1 per cent of people who die from causes other than cancer receive palliative care—in other words, 99 per cent do not receive such care—the doubling of the investment is inadequate. Does my noble friend agree that what we really need is a very significant increase in funding and other resources?

Lord Warner: My Lords, we discussed this issue very fully in our debate on 7 July. There was a general acknowledgement that the Government had done a reasonable job in taking forward support of palliative care, although we all recognise that more needs to be done. As to implementing the manifesto pledge, the services will be extended to include children as well as adults and patients with conditions other than cancer. So we will be extending choice in this area when we do what needs to be done to implement our manifesto commitment.

Baroness Finlay of Llandaff: My Lords, do the Government recognise that there are already half-a-million patients per annum in this country who would benefit from specialist palliative care skills to maximise their quality of life and allow them to be at home as much as they would wish, but that some PCTs seem unable to meet their commitments to hospice providers providing care in the community?

Lord Warner: My Lords, I pay tribute to the noble Baroness for the work that she has done in this area, which is of international renown. We have shifted the balance of power to primary care trusts, which are best placed to make judgments about the support to be given to their local services. We have not only shifted the balance of power but we have given them a five-year period of roughly a 9.5 per cent cash increase year on year to expand the services in their areas.

The Lord Bishop of Newcastle: My Lords, bearing in mind the report of the Select Committee of this House which stated that Britain is a world leader in palliative care but that this branch of medicine is underfunded, when will the Minister be able to give an assurance that more funds will be forthcoming? Will he assure the House that what is euphemistically known as "assisted dying" will not be seen as an alternative to allocating the resources needed so that every terminally ill person receives the palliative care that he or she needs right across the country?

Lord Warner: My Lords, I made clear in our debate on the Assisted Dying for the Terminally Ill Bill that the Government have a position of neutrality in this area. I have nothing to add to what I said then. We were the only party to put in its election manifesto a commitment to improve funding for palliative care. We will honour that promise. We are consulting the public. We want to listen to what they have to say and to stakeholders, including organisations such as Marie Curie Cancer Care. We will come forward with proposals as soon as those consultations have been completed.

Baroness Neuberger: My Lords, given that the Government have made a commitment to increase funding, as well as listening to the consultation, will they look at the lack of funding, particularly for older people who are dying of conditions other than cancer? Whatever comes out in the consultation, that is a serious inequality in care provision.

Lord Warner: My Lords, people will have to be patient until we complete the consultation. There is no point in our making policy until we have heard what the public and stakeholders have to say. We shall bring forward proposals at the end of that process.

Baroness Knight of Collingtree: My Lords, did the Minister mean to imply that there will be no action until the public's voice has been heard? He has mentioned consultation twice. How is it being carried out and when should we expect to know the result?

Lord Warner: My Lords, we have been through a process of extensive consultation, which has still not been completed. There are questionnaires on websites; 1,000 people met in Birmingham from all over England 10 days ago, when their views were taken on a wide range of issues, including end-of-life issues; and there have been regional consultations. There are many opportunities to find out what we have been doing on the Department of Health website, which the noble Baroness can read if she wishes to do so. Those consultations will lead to a White Paper at the turn of the year, when all will be made clear.

Lord Laming: My Lords, it is encouraging to hear the Minister paying tribute to the remarkable contribution that volunteers make to the hospice movement both in bedded units and in people's homes. Does he agree that there is a danger of volunteers being exploited, and that far too much of their time is diverted into fundraising when they would be much better employed supporting people with special needs?

Lord Warner: My Lords, there is always a balance to be struck. As a former chairman of the National Council for Voluntary Organisations, I know that the voluntary sector often strikes the balance between fundraising and service provision very well. It is in the nature of the voluntary sector that a degree of fundraising goes on—that is what makes it the voluntary sector. I pay tremendous tribute to its work on palliative care; long may it continue.

Lord Lyell of Markyate: My Lords, would it be wholly unjust of noble Lords listening to the Minster's answers if we had the impression that this widespread consultation and the wait for a White Paper might involve a small element of treading water? Will the Minister take care to listen to those professionals in the day-to-day care of the elderly in hospital, who know how badly the opportunity for further palliative care at home is needed? Can he find a quicker way of providing money for that?

Lord Warner: My Lords, one of the features of this Government—and the reason they have been re-elected three times—is that they listen. I note that the two candidates for the leadership of the noble and learned Lord's party seem to be learning some of those lessons.

Lord Patel: My Lords, will the Minister confirm that the Government and Marie Cure Cancer Care are discussing extending the Delivering Choice programme to a further 11 sites, to improve end-of-life care for patients, irrespective of their diagnosis? When are the chosen centres likely to be announced?

Lord Warner: My Lords, the initiative referred to by the noble Lord has been discussed, and will continue to be discussed between departmental officials and Marie Curie Cancer Care. The initiative has been taken by Marie Cure itself, which is in the driving seat in terms of how rapidly it wishes to roll it out. We shall have to wait until the consultation process is completed before deciding how we spend the money promised in our election manifesto.

Earl Ferrers: My Lords—

Baroness Amos: My Lords, we are into the twenty-third minute.

Prisoners: Use of Restraint

Baroness Neuberger: asked Her Majesty's Government:
	Whether they will review the contracts of those prisons and secure training centres that did not allow access to the Home Office team investigating the use of restraint on teenage prisoners.

Baroness Scotland of Asthal: My Lords, the secure training centre operators have given full co-operation to the panel of experts appointed by the Youth Justice Board to review the restraint techniques used in secure training centres. The panel met at Rainsbrook Secure Training Centre on 10 March this year and sought the views of staff and trainees on restraint methods. The Government see no reason to review the contracts.

Baroness Neuberger: My Lords, I thank the Minister for her reply. I take it, therefore, that she regards last week's article in the Guardian as mistaken and wrong. Further, does she think that there is an argument for further investigation of the use of various kinds of restraint techniques, particularly on young people who are in the care of the state in our secure training centres?

Baroness Scotland of Asthal: My Lords, I am afraid that I did not have the advantage of reading all of the Guardian article. Let me reassure the noble Baroness, however, that I know of the concern that was expressed, and the matter appears to have been inaccurately reported. For the purposes of clarity, I should say that Rebound did not refuse outright to admit the two people; it asked for a postponement of the visit until the Crown Prosecution Service had reached a decision in the Gareth Myatt case. Those two people had produced the original report and, on the advice of lawyers, that was the position taken. I reassure the House that there is an ongoing, wider review on the use of pain techniques.

Lord Renton: My Lords, should not the Home Office team investigating the use of restraint on teenage prisoners be able to apply a universal system without any variation of the contracts with which various prisons or training centres are required to comply? Should there not be a systematic universal system for dealing with this matter?

Baroness Scotland of Asthal: My Lords, we have clear guidelines on the matter. I reassure noble Lords that the panel of experts was appointed by the Youth Justice Board, and it commissioned the consultants to review the operation in each of the centres. This they did, and they have reported.

The Earl of Listowel: My Lords, does the Minister agree that the better trained and supervised the prison officers working directly with children in young offender institutions and secure training centres are, the better equipped they are to intervene early and de-escalate situations before they get out of hand and force needs to be used? I welcome the introduction last year of a seven-day training course for prison officers to train other prison officers in the needs of children, but is the Minister aware of the view of the chair of the Youth Justice Board that that is only the most elementary introductory training for prison officers to learn about children's needs? What steps is she taking to improve that training?

Baroness Scotland of Asthal: My Lords, I agree with the noble Earl that enhanced training to meet the needs of young people in our youth estate is extremely important. That training is taking place, and we intend to intensify it. Further, it is being deepened throughout the estate.

Viscount Bridgeman: My Lords, can the Minister specifically assure the House that training will rigorously cover resuscitation techniques when there are vital signs that the child is in trouble and that the treatment can be halted if necessary?

Baroness Scotland of Asthal: My Lords, that basic training is very much part of the training that takes place. I certainly undertake to check its precise nature and to write to noble Lords if there is greater information about it. However, I reassure noble Lords that the care that needs to be taken with young people in such situations is absolutely understood. One of the reasons for driving forward the review is that we want to make sure that we have the best possible means of keeping young people safe and restraining them in a way that is appropriate.

Lord Dholakia: My Lords, the Minister may not deem it necessary to review the contractual arrangements in light of the use of restraint, but will she ask Her Majesty's Inspectorate of Prisons to examine the excessive use of restraint, particularly in secure training centres, and will she ensure that the Home Office has on no account abrogated its responsibility for the welfare of that individual?

Baroness Scotland of Asthal: My Lords, I assure the noble Lord that excessive use of restraint has not taken place. The Home Office is vigorous in its monitoring to make sure that what happens in the juvenile estate is appropriate. I am absolutely confident that the inspectorate will take those issues very seriously in the discharge of its duty.

Lord Elton: My Lords, will the Minister undertake to see that a senior member of the Home Office is sent to Norway to study the training of those who are in charge of custody of adults and children there and report back fairly soon to the Home Secretary with information about how they do it, which is infinitely better than how we do it and takes a great deal longer?

Baroness Scotland of Asthal: My Lords, I cannot make that promise to the noble Lord, but I can certainly tell him that we energetically look at what other partners are doing. I have to say that we ourselves are seen as a resource of some excellence.

Baroness Sharples: My Lords, have any young people died as a result of these restraints?

Baroness Scotland of Asthal: My Lords, there is one child in particular on whom the double-seated restraint was used. That matter is being investigated. That child certainly died. That restraint method has been removed.

Consumer Credit Bill

Lord Sainsbury of Turville: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That it be an instruction to the Grand Committee to which the Consumer Credit Bill has been committed that they consider the Bill in the following order:
	Clauses 1 to 55
	Schedule 1
	Clauses 56 to 59
	Schedule 2
	Clauses 60 to 69
	Schedule 3
	Clause 70
	Schedule 4
	Clause 71.—(Lord Sainsbury of Turville).

On Question, Motion agreed to.

Children and Adoption Bill [HL]

Baroness Crawley: My Lords, I beg to move the Motion standing in the name of my noble friend Lord Adonis on the Order Paper.
	Moved, That the amendments for the Report stage be marshalled and considered in the following order:
	Clauses 1 to 4
	Schedule 1
	Clauses 5 to 14
	Schedules 2 and 3
	Clauses 15 and 16.—(Lord Adonis).

On Question, Motion agreed to.

Racial and Religious Hatred Bill

Report received.
	Clause 1 [Hatred against persons on religious grounds]:

Lord Foulkes of Cumnock: moved Amendment No. 1:
	Page 1, line 4, at end insert—
	"( ) Nothing in Part 3A of that Act (inserted by the Schedule to this Act) is to be read or given effect in a way which prevents or restricts expressions of dislike of—
	(a) any religion, or
	(b) any person's lack of religious belief."

Lord Foulkes of Cumnock: My Lords, this speech will be shorter and less rumbustious than the two previous speeches that I have made on this issue. I see the Leader of the Opposition nodding contentedly. I encourage noble Lords opposite not to spend too much time examining the exact effect of my amendments, because they are probing amendments.
	Noble Lords will recall that the House agreed a number of amendments in Committee on 25 October which fundamentally changed the structure and the content of the Bill, including the introduction of a new freedom of expression exemption. In response to those amendments, the noble Baroness, Lady Scotland, generously and helpfully said that she would consider the issue further. The purpose of these amendments, therefore, is to find out the current status of the Government's consideration of the Bill.
	First, will the Minister explain to the House at what specific areas of the Bill the Government are looking? Secondly, with whom are the Government discussing these issues? Finally, when does she expect the Government to be able to return to the House with concrete proposals on the way forward? I hope the Minister might feel able to give the House a response to these questions early in the debate. I beg to move.

Baroness Scotland of Asthal: My Lords, with the House's agreement, it may be convenient if at this stage I respond to my noble friend to apprise the House of where we are collectively on these issues. Indeed, I am grateful to the noble Lord, Lord Foulkes, for tabling these amendments.
	The noble Lord has, I know, been a keen supporter of the Government's intentions in introducing the Bill to Parliament. He has spoken eloquently about legislation in this area both at Second Reading and in Committee. Noble Lords will know that there are strong feelings on all sides in relation to how we should move forward. The noble Lord has been kind enough to indicate that these are probing amendments, and they provide me with a valuable opportunity to update your Lordships on the progress we have made so far.
	In Committee strong concern was expressed about freedom of expression. Those concerns led noble Lords to vote substantially in favour of the amendments tabled by the noble Lords, Lord Hunt and Lord Lester, the noble and right reverend Lord, Lord Carey, and the noble Lord, Lord Plant. As I indicated then, I wanted to take stock of our position and look for ways in which that deep concern could be addressed without substantially undermining the Government's stated policy aim of legislating to outlaw incitement to religious hatred, which I continue to believe is fundamentally correct.
	We have considered the issues further, and I have had a number of discussions both with those who support the Government's intentions in this area and those who have deep reservations about how the legislation might operate in practice. Those discussions have been ongoing on all sides of the House. I am sure that noble Lords will appreciate that squaring this particular circle is in no way easy. If it were, I am sure that others far wiser than I would have done it a long time ago.
	The time between Committee and today has not been sufficient for the Government to come to a definite resolution of the matters in dispute. There are further discussions to be had, both with the Opposition and with noble Lords on these Benches. Therefore we are unfortunately not in a position to table government amendments for the House to consider on Report. I am, however, continuing to look at how we might make headway and perhaps achieve a level of consensus. I can give your Lordships a personal assurance that we will do all we can to achieve such a consensus, as I am sure your Lordships would wish.
	Four main areas of the Bill have changed as a result of the amendment that was made in Committee. I shall briefly set out our view in relation to each of these. I want to make clear that nothing is set in stone at this stage. In considering how to take the Bill forward, we will look at how our proposals can be adjusted to provide the reassurance that so many of your Lordships have indicated is required. If we are able to achieve that, we will look to table government amendments at a later stage. I hope that that will be at Third Reading.
	The amendment that was made in Committee restructured the Bill so that the religious offence is entirely separate from the racial offence. There are difficulties with providing consistency between that and the existing racial offence, since it suggests—more than we accept—that religion and race are completely separate issues. I accept, however, that the House has clearly signalled its preference for the new framework. We are prepared to consider whether the new structure should remain.
	The amendment also removed the words "abusive" and "insulting" from the offence, leaving only "threatening words or behaviour" capable of prosecution. As I indicated in Committee, we have real difficulties with that change. If we confine the offence relating to religion to cases in which threatening language has been used, we would limit it to a very narrow range of behaviour. In the sort of cases that have been dealt with under the racial offence, it is clear that campaigns used to stir up hatred use a range of words, some of which may be threatening but are not necessarily so. Abusive and insulting words can also be used, and they can have just as devastating an effect on the communities concerned. Therefore, limiting the offence only to threatening words and behaviour would make it far too difficult to get to the sort of material that is used to incite hatred and would severely curtail the ability of the Crown Prosecution Service to bring to justice those responsible. We have to bear in mind that those who seek to take advantage of the provisions will want to craft what they say very keenly to avoid being subject to any restraint provided by us through the law.
	The most important amendment to the Bill is, I respectfully suggest, to the freedom of expression protection included at paragraph 29J to the schedule. My noble friend's amendment would remove that provision and replace it with something far more tightly drawn. That issue is at the heart of concerns raised by most of those who spoke in Committee. The wording currently contained in the Bill would cause us some difficulties in providing a workable offence for prosecutors. However, I believe that it should be possible to include something that goes some way towards that type of wording, which would be sufficiently sound and robust in defending the freedom of speech concerns raised both inside and outside Parliament. That is something that we shall continue to consider and discuss with noble Lords, with a view to coming up with a form of words that I hope will be acceptable to all.
	Lastly, there is the issue of whether intent should be the only threshold for bringing forward prosecution of these offences. Your Lordships will know that that is also being looked at in the context of the Terrorism Bill currently being considered in the other place. While the wording that was used in what is known as the "likely limb" is obviously considered to be too loose by a number of noble Lords in respect of the Bill's offence, we shall want to see whether there is a form of words that will enable prosecutions to be brought without having the unintended consequences feared by many. We understand that that is a difficult road to walk, but we intend to see how best it can be done. If we are successful in doing that, we would hope to be in a position to table amendments at Third Reading, subject to the House's agreement.

Lord Wedderburn of Charlton: My Lords, I am sure that, like me, all noble Lords are grateful for my noble friend's elucidation of the position. However, would she agree that the Bill as it now stands fully, completely and wholly fulfils the manifesto commitment that the Labour Party made, and that to go further on incitement would risk gold-plating or lead-plating that commitment?

Baroness Scotland of Asthal: No, my Lords, I would not.

Lord Skelmersdale: My Lords, the Minister said that she hoped that the Government could resolve this matter and table amendments at Third Reading. Would she accept that, with regard to the Companion to the Standing Orders, that would be undesirable, and that therefore a far better plan, if this matter is to be finally settled in your Lordships' House rather than in another place, would be to recommit the Bill—and the schedule in particular?

Baroness Scotland of Asthal: My Lords, we do not believe that that would be the most felicitous way in which to proceed. I predicate any comments that I make on the fact that we would have to have the House's assent; but if the House were to assent to Third Reading being the most appropriate time to dispose of this matter we would be able to dispose of these remaining issues expeditiously.

Baroness O'Cathain: My Lords, I am grateful to the Minister for her exposition of what she is hoping to achieve, but we are right up against it in terms of time. Is there any way we could extend the time between Report and Third Reading? It would be terrible if the Government put down amendments the night, or a day or two, before Third Reading, because some of us would want to spend a lot of time considering the wording and the implications of those amendments.

Baroness Scotland of Asthal: My Lords, we understand that view. Of course the date upon which Third Reading is fixed is a matter for the business managers, but we would hope, by the time this matter came to be debated, that we would have an opportunity to consider those amendments so we could have a proper discussion. We are in the hands of the business managers, but I am sure that there are those who will be sensitive to the position in which we find ourselves.

Lord Forsyth of Drumlean: My Lords, before the Minister sits down, I have a question that is not in any way meant to be hostile. In the days when I was in government, the business managers did not allow Bills to come before the House at any stage until policy had been sorted out. Why was it not possible to sort out the policy before deciding the date on which these matters were to be considered?

Baroness Scotland of Asthal: My Lords, we are sorting out the policy now. Let us look at where we are. The Government have put forward a number of propositions with which this House has comprehensively disagreed. There are two ways in which we can deal with that. We could say, "Very well. This House has spoken. We will do no more. The matter will go back to the Commons. The Commons—which, after all, has a mandate as the elected House and the voice of the people—will decide".
	This is an issue of such sensitivity that there is a desire to accommodate and seek to compromise, to find a middle way. I had understood that those in this House, discharging their duty with such propriety and care as always, would, if possible, prefer to find a way through this rather difficult situation. There may be others who would rather enter into the usual fray.

Baroness Carnegy of Lour: My Lords, before the Minister finally sits down, and with the leave of the House, is she convinced that the Third Reading procedure, which puts so many constraints on discussion, is the right way to proceed in view of what she has just so rightly said about the importance of trying to settle the matter in this House? It does not seem quite certain to me.

Lord Lester of Herne Hill: My Lords, before the Minister sits down—that pleasant fiction that we all adopt—I have five points. First, the noble Lord, Lord Hunt of Wirral—I nearly said "my noble friend", because he and I are at one in the way we approach these matters—and I have to account to our respective tribes and those beyond them for any negotiations that take place. Secondly, I have confidence in the wisdom and enlightenment of the Home Secretary personally in his ability to produce a consensus for a Bill of which we can all be proud. I emphasise that not to disparage anyone else, but simply to say that about him.
	Thirdly, we do need more time, because the Government have not yet shown us the colour of their money. Fourthly, the reason my lawyers talk about "without prejudice" negotiations is that it does prejudice negotiations if one talks about them in public. Indeed, when the Minister was speaking, there were one or two things she said I thought might prejudice negotiations, but in fact I do not think they will.
	Lastly, if we can reach an agreement, it should be done before Third Reading by way of negotiation. Then, on Third Reading, provided that the House is content with the bargain that has been struck, we can send the Bill to the other place and avoid such ghastlinesses as ping-pong and the Parliament Act. I therefore entirely agree with the way the Government suggest that the negotiations should proceed. In the end this will save parliamentary time and produce a better Bill.

The Lord Bishop of Oxford: My Lords, before the Minster sits down I would like to thank her for her statement and for the widespread consultation she has initiated and which she has indicated will continue.
	We on these Benches have some sympathy with the Government's position that there is a closer relationship between racial hatred and religious hatred than many people recognise. They are both issues of identity; they are not simply matters of choice. Nevertheless, as we argued—particularly on Second Reading—more robust exchange is allowed about religion than is appropriate to the subject of people's racial heritage and background. I am glad that the Government are going to keep those elements separate.
	Unfortunately, the amendment tabled in the name of the right reverend Prelate the Bishop of Southwell and myself was not properly debated in Committee. It overlapped substantially with the amendment tabled by the noble Lord, Lord Lester, but we kept in the words "abusing" and "insulting". I will therefore look with particular care at what the Government eventually come up with in this matter.
	Clearly, we are all united about having adequate provision for freedom of expression at all times. We on these Benches are particularly concerned about the likelihood limb. We will carefully scrutinise what the Government come up with. I hope that the Government will respond to the noble Lord, Lord Lester, and that we can get an agreement and a compromise on this matter before Third Reading.

Lord Mackay of Clashfern: My Lords, I do not propose to suggest that the Minister has not yet finally sat down. Her intervention was by leave of the House to respond to the desire of the noble Lord, Lord Foulkes of Cumnock, for information, which she acceded to. The matter is now open and any noble Lord who wishes to may make a contribution.
	The proposal to continue negotiations in the hope of reaching a settlement and then bringing that forward to Third Reading is perfectly appropriate. I welcome that as a way forward. It is far preferable to seeking confrontation with the other place. I have never found that attractive except in the most exceptional circumstances.
	I am anxious about a matter that I have raised on several occasions and which so far the Minister has not addressed. That is now further focused by the Government's proposal to have an offence concerned with the glorification of terror. My understanding—though I may be subject to correction—is that that generally takes place in the context of some religious faith or doctrine. Terror is glorified through the application of that doctrine to the circumstances in which we are now placed. If that is correct there is a danger—unless the language is very accurate—that the Bill in its previous form would cast the protection of criminal law round the glorification of terror in the context of religious belief. This matter needs to be dealt with carefully if the two matters that I have referred to are not to be confused and the relationship between them damaged.
	The other point that I wish to make, because it has been raised by the right reverend Prelate the Bishop of Oxford, relates to the relationship between race and religion. I am one of those who think that there are substantial differences between the two and I see no reason why religion should be dealt with separately from race, so long as it is dealt with appropriately. One thing that needs to be said about religion is that it may inculcate practices that are themselves hateful. That may well be a matter of judgment, but it certainly is possible; whereas one would not expect that to be a consequence of race by itself. So there is room for considerable difference between the two, and merely separating them in the Bill does not seem to pose any problem in dealing appropriately with religion as well as with race.

Lord Wedderburn of Charlton: My Lords, I apologise to the House as I thought that it was right to put a question to my noble friend on the Front Bench before she sat down. It led to something that appeared rather abrupt. With the leave of the House, perhaps I may add that in our manifesto commitment, which is, after all, central to the Government's argument, the centre point of concern is exactly that which has been put by the right reverend Prelate—namely, what has come to be called the "likely to" test, in addition to intention. Intention is involved in incitement; a ban on incitement is what we promised. The amended Bill does that, but I understand that the Government may wish to deal with particular words at particular places, with such long amendments. However, the "likely" test and the intention test is the core of what we now have, which we should keep.

Lord Hunt of Wirral: My Lords, first, I thank the noble Lord, Lord Foulkes, for giving us an opportunity to see where we are. Secondly, I thank the Minister for suggesting that we should now, to use her phrase, "find a middle way". I am not sure exactly what that means. I prefer to see it as an intention to seek a level of consensus. That is certainly the right way forward and we will do everything that we can to join with the Government and the many noble Lords with very strong views about how we should proceed. We will certainly do everything we can to assist in meeting the objective that the noble Baroness, Lady Scotland, set out.
	I particularly welcome her statement that nothing is set in stone. That was very important, because in Committee noble Lords reached a decision that was very much an expression of opinion—indeed, to coin her view, they comprehensively disagreed. We reached a decision that has been communicated to the Government and that is the way to produce good legislation—to have a Government who listen and then seek to find the right way forward.
	I agree with my noble and learned friend Lord Mackay that one of the most important objectives in all this is to look at the various areas of legislation that are now proposed—he referred to the glorification of terrorism, but there are parts of the Equality Bill and other current legislative proposals which we have to see in context. I share the noble Baroness's wish to find some way through.
	I strongly agree with the noble Lord, Lord Wedderburn, that we must pay attention to what was said by the Labour Party in its manifesto, but, as I have pointed out previously, the manifesto was clear in its commitment to seek,
	"how best to balance protection, tolerance and free speech".
	That, I hope, is how this House has approached the problems before us.
	I agree with the right reverend Prelate the Bishop of Oxford that, in many ways, robust exchanges take place in the context of religion but I prefer the view of my noble and learned friend Lord Mackay of Clashfern that in fact they are very separate. The right reverend Prelate was not so convinced, but I hope that I will have the opportunity of persuading him.

The Lord Bishop of Oxford: My Lords, I do not think that either the noble and learned Lord, Lord Mackay of Clashfern, the noble Lord, Lord Hunt of Wirral, and I fundamentally differ on this issue; it is just that some people are mistaken in thinking that religion is only a matter of choice. Millions of people in the world are born into a religion and other people associate them with that religion. We are not in substantial disagreement on that.

Lord Mackay of Clashfern: My Lords, that is exactly my position.

Lord Hunt of Wirral: My Lords, I sense that consensus is spreading; it is infectious. I am delighted that the Government have decided to accept the infrastructure which is now the Bill. To have the proposed new religious hatred offences set out clearly in their own schedule to the 1986 Act and not lumped as an add-on to existing racial offences is an important step forward. I welcome the Government's concession on that. We can certainly proceed to deal on that basis.
	The change makes it much easier to understand what is proposed in the Bill. It gives us a great opportunity to get the proposals absolutely right. The change means that we can move on to those other three areas, which I will deal with briefly.
	The first is the "likely limb", as it is now termed. The Minister should be aware that this is a very important point for a range of my noble friends and other noble Lords. On this side of the House we feel strongly that it is important to have the burden of proof where it is: in the Bill, as amended. We are not dogmatic about that, but we feel the need for reassurance about the likelihood of frivolous or vexatious charges being brought under this legislation, or certainly being investigated under it. We do not believe that the original Bill was watertight. I hope that the burden of proof will be firmly on the prosecution.
	The other main question is the nature of threatening, insulting and—in the middle—abusive behaviour. It is important that we recognise that on this side of the House we are deeply uncomfortable with the notion that causing a sense of insult could, of itself, involve the transmitter in the sort of legal proceedings we are talking about. Insult is in the mind of the insulted person, after all. That is such an important point. If the bar is set so low, the belief rather than the believer is unquestionably being protected. That truly would be a new "right not to be offended". As it stands, "threatening" is much more ad hominem but I look forward to discussing that point with the Minister.
	Finally, on the freedom of expression clause, I detect a willingness on the part of Ministers to accept what is in the Bill. After all, we have merely put into legislation what the Government have always said. Now to see freedom of expression so clearly set out is a huge advance. The amendment tabled by the noble Lord, Lord Foulkes of Cumnock, would rip the heart out of the Bill in its amended form. I know that Hearts are very dear to the noble Lord, even in these troubled times, and I hope that he will not force this matter to a vote.
	Everybody will have their own view on what imperfections there may be in the new freedom of expression clause but as I have pointed out, it does no more than embody what Ministers have been saying all along.
	I welcome what the noble Baroness, Lady Scotland of Asthal, has said, although I have a great deal of sympathy with my noble friends who asked for more time. We probably do need more time, whether by means of a recommitment, as my noble friend Lord Skelmersdale suggested, or simply a period of more open discussion. We need to argue our way through this situation rather than take entrenched positions. However, I very much welcome the noble Baroness's expressions of view today.

Baroness Scotland of Asthal: My Lords, I hope that I am not out of order in responding to some of the points made. I say to my noble friend Lord Wedderburn that I did not by any means wish to be curt but others wanted to speak.
	There has been much helpful discussion about where we are now. We very much take into account the comments that the noble and learned Lord, Lord Mackay, made about ensuring that we look at the broader framework within which this issue sits. He is right to identify a potential difficulty, and we are bearing that in mind as we go forward. The noble and learned Lord is absolutely right to say that we would hate to see a cloak being given to acts which should properly be dealt with by virtue of an assertion that they were made on some basis of faith. We are very alive to that point.
	We are seeking a level of consensus, and therefore I am concerned in case the noble Lord, Lord Lester, feels that I have in any way trespassed into an area which would make that more difficult. I hope that I have not done so.
	This is not an easy area, as I believe we have all demonstrated in our comments. I very much appreciate the remarks of the noble Baroness, Lady Carnegy of Lour, who asked whether this is the right time. We are where we are, and certainly the consensus view is that we should try to make progress, if we can, between now and Third Reading in the hope and aspiration that Third Reading can take place at a sensible time when we will have had discussions and will be able to make progress. To do otherwise would defeat the whole purpose of the debate that we are having now.
	I shall deal with the issues in order. Like the noble Lord, Lord Hunt, we are absolutely determined to ensure that frivolous and vexatious cases should not be brought. That is very much part of the thrust of what everyone wishes to see and, as we all know, there is already a sift from the CPS and the Attorney-General. However, I listened carefully to the point made both in Committee and today that it is not just the charges that should be taken into account but also the nature of the bringing of investigations. I very much take that on board.
	I take on board, too, comments made in relation to intent and the "likely to" test. We have had a number of discussions about whether intent simpliciter is enough or whether recklessness or other issues should be considered. I simply reassure the House that those issues are exercising our concerted efforts. I just say to noble Lords that we have to keep the benchmark which will enable proper—I emphasise "proper"—prosecutions still to be possible. I am sure that no one in the House would like us to arrive at a situation where proper prosecution of proper cases in relation to inciting racial and religious hatred were not possible because of any changes that we make. I know that that is not what anyone in this House wishes.
	I hope that I have made it absolutely clear that we understand that freedom of expression is the biggest issue which has caused the most concern. Proper debate, proper discussion and proper criticism of differences in faith and religious belief should not be chilled but should be capable of continuing with an appropriate amount of vigour and vim, as would be consistent with a vibrant democracy. We understand that too. So we will look very carefully to see whether a formula can be brought forward with which all parties can feel more content.
	We are seeking consensus, so it will be incumbent upon us all to move a little. We would like a situation where all would be content, if not totally thrilled. That is an aspiration that we should seek to deliver. I emphasise that many say that the Government's position as presented in Committee was the correct position from which we should not move. We understand that a whole spectrum of views have to be brought together to a position where each can feel comfortable. I know that those sitting on the opposite Benches have similar difficulties going the other way, too.

Lord Foulkes of Cumnock: My Lords, I thank my noble friend Lady Scotland very sincerely for what she has said today, for the diplomatic and sensitive way in which she has dealt with the Bill and for the hard work under way to find a resolution to difficult issues.
	I understand the noble Lord, Lord Forsyth of Drumlean, only too well. He, like myself, loves a political dogfight. On this particular issue, however, it is better to try to move forward by consensus.

Lord Forsyth of Drumlean: My Lords, I prefaced my remarks by saying that I did not want to criticise the Government. It is not a matter of having a political dogfight. It is a matter of principle that the Government should work out their policy before the Bill comes before the House. The business managers and the Government decide that. That was what I sought to explore with the Minister, who gave me a very courteous response.

Lord Foulkes of Cumnock: My Lords, is it not wonderful to hear a Government who pay attention to what is said in a debate, take account of it and act accordingly? I find that exceptionally good. I was pleased to hear the noble Lord, Lord Lester of Herne Hill, acknowledge that in his gracious and eloquent speech.
	Clearly, time is needed for discussions and consultations to take place to resolve the issue. I am looking forward, as I know all Members of the House will be, to the amendment which the Government plan to table at Third Reading. So, notwithstanding the arrow that was directed at my heart by my good friend the Opposition spokesman, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Avebury: moved Amendment No. 2:
	After Clause 2, insert the following new clause—
	"ABOLITION OF CERTAIN RELIGIOUS OFFENCES
	The following offences are hereby abolished—
	(a) blasphemy and blasphemous libel;
	(b) any distinct offence of disturbing a religious service or religious devotions;
	(c) any religious offence of striking a person in a church or churchyard."

Lord Avebury: I beg to move the amendment introducing the first new clause. The atmosphere of consensus created by the debate on the previous amendment is very welcome. I particularly appreciated the remarks of the right reverend Prelate the Bishop of Oxford, who said that there must be robust exchanges on questions of religion. I hope that that means that the Church is coming round to the view that blasphemy should, at last, be abolished. Although it is impossible to imagine that everyone on the Bishops' Benches would agree with that proposition, if several do so it could be a weighty influence in helping the Government to make up their mind. It is the Government whom we have to convince to take this matter forward after today's debate.
	The last time there was a prosecution for blasphemy in England was the Gay News case of 1976, when the editor of that newspaper was sentenced to nine months' imprisonment, subsequently lifted on appeal, for a poem that appeared in the paper. The arguments for abolishing the offence have been dealt with on many occasions in this House since then: in the Blasphemy (Abolition) Bill of 1995; in the Anti-terrorism, Crime and Security Bill of 2000; the Religious Offences Bill of 2002; in the Select Committee on Religious Offences, which spent a whole year examining the matter in 2003; in the Serious Organised Crime and Police Bill in 2004; and at Second Reading of this Bill only a few weeks ago.
	One of the main reasons for coming back to the proposal now is to make it clear once and for all that this Bill does not, and is not intended to, introduce a new statutory offence of blasphemy by the back door. Subject to this amendment being agreed to, one could say whatever one liked about the sacred entities or beliefs of a faith. There has been no response to the challenge that I issued at Second Reading to draft a form of words "ridiculing holy objects" that would be liable to prosecution under this Bill.
	I mentioned the Ship of Fools website which ran a competition to discover the 10 funniest and 10 most offensive religious jokes. The conclusion was that the Almighty was fair game and that blasphemy was a minority concern. The so-called jokes were indeed grossly offensive and some of them were undoubtedly blasphemous in law as well as according to ordinary English usage, but they would not make any sane person hate Christians. As long as the offence of blasphemy technically exists, however rarely it is used, there is confusion between incitement to hatred of believers and hatred of beliefs themselves. We have seen quite a bit of that already on this Bill. A new argument for getting rid of blasphemy is that it will help to make that distinction absolutely plain.
	There are several other reasons for abolishing this offence and your Lordships have considered them repeatedly. I refer particularly to the report of the Select Committee and, since it covers the arguments in some detail, it is necessary for me to summarise them only briefly. First, nobody can say with any confidence what is blasphemous, because the CPS and the courts may well take a completely different view today from what they did in 1976. When there was a public recitation of the James Kirkup poem, which had led to the Gay News prosecution, on the 25th anniversary of the case, the police took no action and there was no significant demand for them to do so. But the uncertainty of the law may itself lead to self-censorship or even actual censorship as it did in the Wingrove case, which is described in Appendix 3 of the Select Committee's report.
	In that case, the European Court of Human Rights decided in 1996 that the British Board of Film Classification had not violated Article 10 of the convention on the basis that Lord Scarman's speech in the Gay News case had fixed the definition of the offence in common law and that the restriction on freedom of expression was within the limited margin of appreciation accorded to member states in assessing whether the interference was for a pressing social need and was proportionate to the legitimate aim pursued.
	That aim was the protection of the right of citizens not to be insulted in their religious feelings dealt with by the court in the Otto Preminger case. The Select Committee concluded that the European Court had wrongly assumed that the House of Lords had clearly formulated the law on blasphemy in the Gay News case and it doubted whether the Court would have upheld the BBFC's decision to ban the Wingrove video if the facts had been correctly argued before them. That shows that our blasphemy laws have continued to have reverberations in Strasbourg within the past 10 years and that the uncertainty may well lead to further expensive and divisive litigation in the future.

Lord Clinton-Davis: My Lords, I do not disagree with what the noble Lord is putting forward, but I have some difficulty in deciding how it fits in with this Bill. Would he kindly tell me whether it does?

Lord Avebury: My Lords, it is not for me to argue with the learned Clerks who allowed this amendment to be tabled as they did in the other place. I am satisfied that, if there were any question about whether the amendment fell within the Long Title, your Lordships could deal with that at Third Reading or perhaps when the Bill goes back to the Commons.
	Secondly, the law protects the Christian faith and arguably only the Church of England, which your Lordships will agree is intolerable in a society that believes in equality before the law, and is contrary to Article 14 of the ECHR on the prohibition of discrimination. As long as this law exists, other faiths may well continue to argue for equal treatment. As your Lordships may know, many Muslims originally believed that the main proposal in this Bill was designed as a substitute for a universal blasphemy offence. Conversely, repealing the offence of blasphemy would make it clear that Parliament does not intend to shield any religion from robust or even offensive criticism.
	Thirdly, because of the Human Rights Act, any prosecution for blasphemy today would be likely to fail either on the grounds of discrimination or through the operation of Article 10.2 of the ECHR which allows restrictions on freedom of expression only to the extent that it is necessary in a democratic society for public order reasons. The court would have to consider, first, whether any speech or publication subject to the prosecution was intrinsically blasphemous and then whether restricting the freedom to use those words was proportionate to the aim being pursued. In outlining the case for repeal—which I hasten to add was only one possible course of action that it discussed—the Select Committee concluded that, even if a prosecution were successful, it is likely that it would eventually be overturned on appeal either by the higher courts in the United Kingdom or by the European Court of Human Rights on one or more of the grounds that it is discriminatory, uncertain and a law of strict liability. On that argument, repeal would save the considerable expense of proceedings that might well go to Strasbourg.
	Finally, the law is objectionable because, as I said, it imposes a strict liability on a person who wants to publish a document or make a verbal statement about a Christian belief or sacred entity but who has no way of knowing whether he will be committing an offence.
	Some of the witnesses who testified before the Select Committee would have none of those arguments, believing as they did that the prohibition of blasphemy in the Ten Commandments should be part of our domestic law. One cannot have a sensible conversation about any law with people who think that our conduct in the England of the 21st century should be regulated according to instructions supposedly given by God or Allah to individuals living in the deserts of the Middle East in the distant past. We are now living in a multi-religious society where no religious group has the right to impose its rules on the rest of us. Although it is usually best to exercise restraint in speaking about things that are considered sacred, there must be freedom to criticise or attack customs and practices that are said to be sanctioned by religion.
	Scotland and Northern Ireland have survived without blasphemy laws since the middle of the 19th century. Belgium and Spain have no such laws. In Australia, a common law jurisdiction, the Supreme Court of Victoria could not decide whether blasphemous libel was an offence known to the law and, in 1998, threw out the only such case known to have been prosecuted in the whole of the previous century. In Pakistan, on the other hand, blasphemy law is alive and well. As the Foreign and Commonwealth Office states in its human rights report this year, that has fostered an atmosphere of religious intolerance and eroded the social and legal status of religious minorities.
	The Bill deals with the real evil of stirring up hatred against people because of what they believe or practise. Our ancestors hated each other, sticking labels on Lollards, Catholics, Protestants and Jews. That led to the burning of heretics, religious wars that cost thousands of lives and to the Holocaust. Hatred was never brought to an end by hatred, so let the rivalry between faiths, including secularism, be conducted by means of argument or even by mockery and derision. Let poets, novelists, comedians, playwrights and broadcasters say what they please. If God exists, He does not need the protection of this or any other law. I beg to move.

Lord Renton: My Lords, I am thoroughly opposed to the new clause. It abolishes offences that have been part of our civilisation for generations. Indeed, they have been statutory for a long time. To take blasphemy, civilised behaviour should not legalise blasphemy. To take,
	"disturbing a religious service or religious devotions",
	that would be contrary to religious freedom, which we all support. To abolish religious freedom in that way is uncivilised. The final item in the new clause is the abolition of,
	"any religious offence of striking a person in a church or churchyard".
	In our civilisation, we abolished striking of a person. We are totally opposed to it. How the noble Lord can suggest that striking is justified on religious grounds is beyond my comprehension. I hope that all your Lordships will criticise and vote against the new clause.

The Lord Bishop of Oxford: My Lords, I see that I have the pleasure of following the noble Lord, Lord Renton, because clearly he is a very fit man. I read an interesting piece in today's Evening Standard. Apparently the noble Lord, Lord Renton, managed to run faster than his noble friend Lord Pilkington, who is only in his seventies, in order to catch a cab. I look forward to sprinting against the noble Lord myself.
	I approach Amendment No. 2 with somewhat mixed feelings. It is clearly motivated by a genuine desire to remove the vestiges of religious discrimination from our law and I certainly support the principle of a level playing field and equal respect for all religions. But I do raise the question whether this is the right time and the right Bill for such an amendment.
	I should make it clear that I do not wish to defend the present law of blasphemy and blasphemous libel, and I suspect that that goes for all the other Members on this Bench. I could not agree more with the noble Lord, Lord Avebury, that God does not need a law to protect Him. For myself, there is first the question of what might constitute blasphemy. If blasphemy is defined as what "grieves the heart of God", I submit that this is above all about human cruelty: unkindness, injustice and all that defaces the image of God in humanity; that violates his children. Personally, I find a very great deal in our society which is lewd, vulgar and distasteful. Some of it is directed to religion. I would rather we lived in a more civilised society which did not display such signs of decadence, but I do not think that such things count as blasphemy in the same way as torture and cruelty.
	So there is the whole question of what actually counts as blasphemy. On a more technical point, as the majority of the Law Commission argued in 1985, the meaning of these offences is legally uncertain in the place that they give to intention. They are unacceptably discriminatory in protecting only the Christian religion—and possibly only the tenets of the Church of England, as the noble Lord, Lord Avebury, pointed out—and for these and other reasons they are a dead letter. In recent years the Church of England has expressed a willingness in principle to assent to their repeal.
	However, we have advocated a step-by-step approach to deal first with the problem of religious hatred and then to tackle blasphemy. It is asserted that to abolish blasphemy at this point would send a clear message that this Bill is not an extension of the blasphemy law. It is important that such a message should go out and be received. But to deal with blasphemy now runs the risk of sending exactly the opposite message, or at any rate a confused one. If religious hatred is nothing to do with blasphemy, let the two be dealt with separately.
	On the question of disruptive behaviour in church services, places of worship or burial grounds, it is true that Section 2 of the Ecclesiastical Courts Jurisdiction Act 1860 reflects an historical situation which no longer obtains. It would be desirable to reform the law to reflect the needs of a multi-faith society. The Law Commission recognised this in proposing two new offences: the disruption of communal worship and the desecration of places of worship. But such a reform of the law would require very careful consultation and thought.
	As I have said, I think that I can speak on behalf of all the Members on this Bench in not wanting to oppose an amendment like this in principle, but we have to ask whether this is the right time and the right Bill for it.

Lord Lester of Herne Hill: My Lords, my name is down in support of this amendment and, indeed, it is supported by our Front Bench. I should declare a personal and professional interest long past in that I appeared in the Salman Rushdie case when an attempt was made by Mr Choudhury to extend the law of blasphemy to protect Islam against insult. It is right that I should declare it and a little later I shall be saying something about that case and what one may learn from it.
	My task is briefly to explain where I think we are at the moment on the law of blasphemy because the situation now is untenable. The leading English case on the common law of blasphemous libel was decided by the Law Lords in 1979, in the Gay News case. By a majority of three to two, and without the benefit of the framework of the Human Rights Act 1998 or full argument on the issues of free speech, the Law Lords breathed new life into what had been regarded until then as an anachronistic and arbitrary relic of Tudor and Stuart times when draconian powers of censorship had been exercised by the Ecclesiastical Courts and the Court of Star Chamber until they were taken over by the common law courts. As Lord Diplock, one of the dissenting liberals in the Gay News case, observed:
	"In the post-Restoration politics of 17th and 18th century England, Church and State were thought to stand or fall together. To cast doubt on the doctrines of the established church or to deny the truth of the Christian faith was to attack the fabric of society itself: so blasphemous and seditious libel were criminal offences that went hand in hand".
	Mrs Mary Whitehouse brought a private prosecution against the editor and publishers of Gay News alleging that they had,
	"unlawfully and wickedly published . . . a blasphemous libel concerning the Christian religion namely an obscene poem and illustration vilifying Christ in His Life and in His crucifixion".
	For the previous 50 years, the offence had disappeared from the criminal calendar and was regarded as having become obsolete.
	The Gay News defendants were tried at the Old Bailey and convicted. The editor was sentenced to nine months' imprisonment, suspended for 18 months, and fined £500. The publishers were fined £1,000. The Court of Appeal dismissed their appeal and so did the House of Lords. The only member of the Appellate Committee who referred to free speech was Lord Scarman, who explained that he wished not only to give new life to the offence, but also to extend its reach to protect all religions. In the Irish Supreme Court's judgment in Corway, where it effectively abolished the law of libel, it referred to what it described as Lord Scarman's "remarkable" rationale for the existence of an offence of blasphemy. Your Lordships will be pleased to know that I will not read out exactly what Lord Scarman said, but in conclusion, he said:
	"I will not lend my voice to a view of the law relating to blasphemous libel which would render it a dead letter, or diminish its efficacy to protect religious feelings from outrage and insult. My criticism of the common law of blasphemy is not that it exists but that it is not sufficiently comprehensive. It is shackled by the chains of history".
	That is an extraordinary statement from a very enlightened judge.
	The previous trial for blasphemy had taken place 50 years previously in the case of Gott. John William Gott was indicted for having published a blasphemous libel by selling to the public two pamphlets entitled Rib Ticklers, or Questions for Parsons and God and Gott, satirising the biblical story of the entry of Jesus into Jerusalem, from Matthew Chapter 21, verses 2 to 7, which is based on a literal interpretation of the prophecy that the King of Zion would come,
	"riding upon an ass, and upon a colt the foal of an ass",
	which is Zechariah Chapter 9, verse 9. One man in the crowd said, "You ought to be ashamed of yourself"; one woman said, "Disgusting, disgusting". Nothing further occurred. Gott was convicted and sentenced to nine months' imprisonment with hard labour, even though he was suffering from an incurable disease.
	In dismissing Gott's appeal, the Lord Chief Justice, Lord Hewart, said:
	"The appellant has been three times before convicted of publishing blasphemous libels, and he had ample knowledge of what he was doing. It does not require a person of strong religious feelings to be outraged by a description of Jesus Christ entering Jerusalem 'like a circus clown on the back of two donkeys'. There are other passages in the pamphlets equally offensive to anyone in sympathy with the Christian faith . . . Such a person might be provoked to a breach of the peace . . . If the appellant is in ill-health, the hard labour will not be enforced so as to injure him. In fact, a sentence of hard labour will cause the prison authorities to pay even greater attention to his health than they would otherwise do".
	The harsh sentence aroused great public indignation, with strong criticism of the press and condemnation by a number of clergymen. But there was no condemnation or criticism by any of the Law Lords in the Gay News case. In fact, Lord Scarman described as "relevant to British society today" the statement of the Home Secretary, Edward Shortt, when pressed to remit Gott's sentence. The Home Secretary said:
	"The common law does not interfere with the freedom of expression of bona fide opinion. But it prohibits, and renders punishable as a misdemeanour, the use of coarse and scurrilous ridicule on subjects which are sacred to most people in this country. Mr Shortt could not support any proposal for an alteration of the common law which would permit such outrages on the feelings of others as those of which Gott was found to be guilty".
	In the wake of the Gay News case, the Law Commission reviewed the subject and, after a detailed study, its report was published 20 years ago in June 1985. It recommended the abolition of the common law offences of blasphemy and blasphemous libel. It identified three main defects in the common law. First, it stated:
	"The law is to an unacceptable degree uncertain".
	Secondly:
	"In so far as the law requires only an intention to publish the offending words and not an intention to blaspheme, the offence is to an undesirable extent one of strict liability".
	Thirdly, it stated:
	"In the circumstances now prevailing in England and Wales, the limitation of the offence to the protection of Christianity and, it would seem, the tenets of the Church of England cannot be justified".
	I shall omit the differences of view but I note that Brenda Hoggett—now the noble and learned Baroness, Lady Hale of Richmond, a very distinguished Law Lord—was one of those who recommended total abolition.
	Finally, in the case of Choudhury a challenge was made, with the support of many Muslims, to the publication of Salman Rushdie's novel The Satanic Verses, seeking to prosecute Mr Rushdie and his publishers, Viking Penguin, for blasphemous libel. Reliance was placed upon what I have read to your Lordships in the Gay News case and on the European convention. I acted for Viking Penguin. It was a painful experience because it illustrated the great danger of retaining blasphemy as a criminal offence. The great danger was—and remains—that followers of other faiths seek a blasphemy law to protect their faith against gross insult. One religion's faith is, of course, another religion's blasphemy. The Divisional Court rejected the application. It agreed that extending the blasphemy law would be impossible, as did the European Human Rights Commission.
	Having had the appalling experience in that case of a major division between, as it were, white liberals like me, on the one hand, and people of genuine, strong Muslim faith who wanted a blasphemy law, on the other, I quite see that there is no equal protection of the law in their eyes—and there is not—so long as Christianity is given special protection against gross insult and other religions are not. The answer, surely, to the problem is not to seek to extend blasphemy law or to misuse the Bill that we are currently discussing and debating, but at last to bury, as has the Irish Supreme Court, the completely outmoded, almost mediaeval, crime of blasphemy.
	Unfortunately, in a Written Answer of 24 February 2005, the Minister indicated that the Home Office does not apparently regard the offence of blasphemy as dead. In a further Written Answer the noble Baroness, Lady Ashton of Upholland, stated:
	"If material or conduct is gratuitously offensive to Christians, and is prosecuted as such, a finding of blasphemy may be the appropriate response by a court to ensure that the rights of others under Article 9 [of the convention] are protected".—[Official Report, 3/3/05; col. WA 40.]
	I protest at that. An official statement of that kind can only encourage bodies such as Christian Voice and the Christian Institute in their bigoted campaign against the BBC and the regional theatres to prevent public performances of "Jerry Springer—the Opera".
	Whether the offence is abolished in this Bill or soon thereafter, it will not be abolished until the Bishops tell the Home Secretary that they are willing to see it abolished. I believe they have moved strongly in that direction and I very much hope that they will be able soon to give the green light so that we can legislate as we should do.

Lord Clinton-Davis: My Lords, the amendment goes wide of the purposes of the Bill. In no way do I dissent from the fundamental arguments that have been adduced in favour of the amendment, but I remain to be convinced that the noble Lords who tabled the amendment have chosen the right vehicle. The measure being considered is highly important, and I do not dissent from the view that the purpose of the amendment is also important, but I am not convinced that this Bill is the right vehicle.
	The noble Lord, Lord Lester, said that the present situation is untenable, and I agree with him. He seemed to concede in his concluding remarks that perhaps another Bill should be introduced. I wholly agree with that. I was very interested in what he had to say, but it was totally irrelevant. We should aim at dealing with the issues in this Bill.
	It is entirely open to the noble Lord, Lord Avebury, to come forward with another Bill, which I should welcome. But to choose this Bill is entirely misconceived, as I have sought to adduce in this short intervention. I believe that the Bill is aimed at dealing with an immediate situation and should not be confused with the issues that the amendment seeks to deal with.

Lord Crickhowell: My Lords, I have listened to the debate with considerable interest, and I shall not argue that a case cannot be made for the abolition of the current blasphemy law. I shall not even argue that it cannot be done in this Bill—it may be within the scope of the Long Title.
	Earlier this afternoon we had a debate about timing, and when it was appropriate for amendments to be introduced and considered by the House. We are on Report and a pretty fundamental amendment has been tabled. It covers not only the basic issue of blasphemy but in the proposed new subsections (b) and (c), as the right reverend Prelate the Bishop of Oxford, said, it deals with other matters, such as the disturbance of religious services. We need to consider carefully appropriate legislation to deal with such offences, not only in the Christian religion but in others, too. I sense that the noble Lord, Lord Lester, is conscious of the strength of the arguments because I, too, noticed the manner in which he concluded his remarks. He spoke about the Bishops coming forward at some point and giving a green light to legislation. He then said that it could not be this afternoon or at this stage in the Bill's proceedings.
	It has been an interesting debate. It is perfectly sensible for this matter to be raised, and for a signal to be given that we should consider it in a more appropriate way in the future. However, it would be totally wrong to move forward with the clause as it stands at this stage when there will be no proper opportunity to consider the wider implications or whether any substitutes are needed to avoid disturbance of religious services. For those reasons, I could not support the amendment.

Lord Plant of Highfield: My Lords, as one of the authors of the amendment, I should like to say a brief word in its favour. As the noble Lords, Lord Avebury and Lord Lester, have pointed out, the social basis of the blasphemy laws has been entirely eroded. They developed as a common law offence to protect religious belief when it was thought that religious belief, particularly Christian belief, was part of the essential social glue, underpinning the law and the monarchy. Whatever the social glue of a modern society is, it is not generated purely by one religion or one denomination. It seems clear that the doctrines and formulae of the Church of England are given special treatment under the blasphemy laws, so the social basis of the laws has been eroded.
	There are three important arguments, particularly given what my noble friend Lord Clinton-Davis said about whether this was relevant to the Bill. If, as the noble Lord, Lord Lester, said, we go back to the Gay News trial, Lord Scarman argued that the blasphemy laws, or something like them, should be extended to cover all other religions. The danger is that the Bill will be seen by many people as doing that; it is not what the Government or Parliament intend, but a lot of people think that that is what is being done. To remove or rescind the blasphemy laws would make it crystal clear that we were not following Lord Scarman's injunction of extending the blasphemy laws to all other religions.
	Secondly, abolition would clarify the nature of the Bill. The Government have argued that it is not an extension of the blasphemy laws but there is little doubt that some Muslim leaders have thought that that is what they are going to get. The abolition of the blasphemy laws would make it crystal clear that that is not the case and would therefore clarify the nature of the Bill. I support the amendment because I think it makes the nature of the Bill much clearer.
	Finally, the Government have argued all along that the Bill as it was first conceived, and still to a very large extent as amended, draws a distinction between belief and believers. For the reasons I gave at Second Reading, that is not a distinction I find very convincing; nevertheless, it is what the Bill turns on. Given that, the blasphemy laws protect beliefs and not believers. Therefore, we would have two pieces of protective religious legislation on the statute book—the Bill, if it becomes an Act, and the blasphemy laws—both embodying contradictory principles. The Bill emphasises the distinction between belief and believer and protects the believer, not the belief. The blasphemy laws protect the belief and, via the Bill, would also protect the believer. However, the blasphemy laws in themselves protect the belief.
	It would clarify the nature of the Bill and the distinction between beliefs and believer to accept this amendment. It would not do, as a way of trying to resist the amendment, to say that the Human Rights Act has made all this irrelevant, otiose or redundant. If it is redundant, we might as well get rid of it because it gives us too many reasons for people to be dissatisfied by what they think of as unequal treatment before the law, depending on which their religious beliefs. For those reasons, I put my name to the amendment. Unlike my noble friend Lord Clinton-Davis, I think that it is central to clarifying the nature of this Bill.

Viscount Bledisloe: My Lords, although I do not think that anyone would accuse either the noble Lord, Lord Avebury, or the noble Lord, Lord Lester, of being excessively brief in their remarks, they said absolutely nothing about either subsections (b) or (c) of their amendment, which would abolish a "distinct offence", whatever that may mean,
	"of disturbing a religious service"
	and a,
	"religious offence of striking a person"—
	whatever that phrase may mean.

Lord Avebury: My Lords, I specifically said that I did not want to go over the whole of the ground that was dealt with by the Law Commission. If the noble Lord would like to refer to the report of 1985, he will find that this formulation of words was recommended by the Law Commission 20 years ago.

Viscount Bledisloe: My Lords, I am most grateful to the noble Lord, but that is perhaps not a great help to those who are being asked to decide on this matter at this moment.
	As the right reverend Prelate the Bishop of Oxford said, it may well be that we need a new offence of disturbing religious services of any kind rather than merely Christian services, to which I suspect—though I know not—this amendment only applies. However, surely no one can doubt that religious services and religious devotions are entitled to a greater degree of protection against disturbance than, let us say, public meetings at Hyde Park Corner. Surely to propose to abolish, without any words of explanation, the present offence of disturbing a religious service without putting anything in its place is asking the House to do something ridiculous. For that reason, and because the amendment contains subsections (b) and (c) as well as subsection (a), I suggest to the House that this amendment must fail.

Lord Wedderburn of Charlton: My Lords, I nearly put my name to this amendment, but, through a failure of timing, it does not appear. The crime of blasphemy, in its medieval origin, is very understandable, but it has shrunk, should shrink further, and should be disposed of by your Lordships, if necessary, today. Of course, I quite understand the argument which Professor Francis Cornford called the principle of unripe time in his little book, Microcosmographia Academica, which was written for fellows of a particular college who engaged in academic politics. He suggested that such readers, when met by the principle that the time is not ripe, should say, "That is to say that the just and right thing should not be done now for fear of doing more just and right things in the immediate future". For all the reasons given by my noble friend Lord Plant, it is plainly appropriate and sensible to deal with this matter in this Bill.
	Very little has been said, except by the noble Lord, Lord Lester, about the nature of blasphemy. It began as a denial of the truth of the Christian religion, the Bible, The Book of Common Prayer or the existence of God—I summarise from the best textbook. That was understandable as a medieval offence, but everybody felt uncomfortable with it as the 19th century began to edge out that summary of the cases between 1514 and 1841. The courts began to say that the offence was not quite just because it was a manifest block on sensible freedom of discussion, a concept that the 19th century began gradually to understand. They came to say that it was such a thing only if it led to a risk of breach of the peace. Lord Sumner said judicially that blasphemous words were punishable,
	"for their manner, their violence, or ribaldry, or, more fully stated, for their tendency to endanger the peace, then and there, to deprave public morality generally, to shake the fabric of society and to be a cause of civil strife".
	Of course, there are plenty of other crimes that punish people for causing civil strife or the like. Those words were said in 1917, but that was not an easy position to maintain.
	So we come to the modern cases, where they tend to say—again, this is a summary—that it is blasphemy if the words are couched in indecent or offensive terms likely to shock and outrage the general body of Christian believers in the community. Now, even those who sit on the Benches of the right reverend Prelates are not so easily outraged now as when that summary was first given many decades ago. There are, of course, always traps for the unwary. In the case that Mrs Whitehouse brought against Gay News, that formula was put forward in rather strong terms. When we look at it now, we think that those involved in Mrs Whitehouse's case, in 1979, perhaps discussed things in a way that is not appropriate to modern times.
	It is surely time to say that this particular privilege for the Christian religion has gone away and officially gone a distance that is far from modern mores and thinking. That particular privilege should not be on the statute book for that religion. I said "the Christian religion", but it is not at all clear that it covers the whole religion. The better view appears to be—I see my noble friend Lord Lester nodding, and on this he is indeed my noble friend—that only the Church of England can make use of that particular crime.

Lord Lester of Herne Hill: My Lords, I believe—I am out of my depth for, as the House knows, I am not a believer in any of the Abrahamic faiths—that the position is that the Old and New Testaments are covered, as the Old Testament is plainly regarded as part of the Christian Church's faith, but it is the Anglican Church. The Irish Supreme Court pointed out that but for the Church of England, there would be no such crime in this country. There is no Church of England in Ireland, therefore they said it was not enforceable in Ireland.

Lord Wedderburn of Charlton: My Lords, I am happy to accept that further summary of the position from the noble Lord. I was going to say that I had hoped today for a roar of welcome from the Benches of the right reverend Prelates, because they are so near to saying "Yes". The right reverend Prelate indicates that he gave a roar of welcome in principle, for which I am glad, but he too relied on the principle of unripe time to say that we should do it not today but at some future occasion.
	The Church of England should be anxious to get rid of this privileged position. As a secular humanist, I generally support the position of the Church of England. To abolish blasphemy is not to take a step down the road to disestablishment. I would resist disestablishment strongly—I do not say this as a joke; not being an adherent, I may get things wrong, and I apologise if I do—because the Church of England is not a Church that attempts to seize more and more temporal power. There are Churches of that kind, which tend to disapprove and enforce their disapproval of what goes on in the bedroom, tend to tell you that you have got to believe in myths that seem to evolve, decade on decade, with bodily ascensions and all sorts of other stories, and are very fierce with you—at least in theory—if you do not believe in and do not do what they say in the privacy of your life.
	The Church of England has developed, like the rest of law and practice, into a very modern position. It has freed itself from the wish to impose controls of that kind, and it has come very close, even within itself, to accepting the equality of women, which is one of the most important developments of our time. I am very happy that it brings to such problems a broad and liberal mind. It has a bit of a way to go, and I shall judge it as having achieved its final or near-final step on that road when it demands from the BBC that "Thought for the Day" on Radio 4, to which I am sure all your Lordships listen avidly every morning, includes regular contributions from such noted thinkers as Professor Richard Dawkins and Dr Jonathan Miller, whose programme on disbelief I am sure that your Lordships enjoyed last night.
	 The general position of the Church of England is consistent with and promotes a discussion about freedom of expression. It is my hope that your Lordships will express a view—if invited to do so tonight—and that we shall be with the Bishops when they come to vote in the Contents Lobby, as I believe that the vast majority of this House and the other House would, if given the opportunity. Let us give them the opportunity and settle the matter, which we all know should be settled now.

Baroness O'Cathain: My Lords, I oppose the amendment tabled by the noble Lord, Lord Avebury, and supported by the noble Lords, Lord Lester of Herne Hill and Lord Plant, which would abolish the common law offence of blasphemy and other offences that recognise the particular place that the Christian religion has in our constitution and history.
	The legal notion of blasphemy dates back many centuries, as has been pointed out. It is part of a Christian heritage that formed our constitution, and I am of the view that it cannot be considered in isolation from our entire constitutional settlement. The Christian heritage of this country goes back much more than 1,000 years, and its legacy is still very much present in our national life. I take issue with the noble Lord, Lord Wedderburn, who said that it would not harm any of it to do away with the blasphemy law. If we chip and chip and chip away, in the end what will we have?
	The head of state is the Supreme Governor of the Church of England and Defender of the Faith. The coronation oath is sworn by the new monarch and is profoundly Christian. The Church of England and the Church of Scotland are by law established. Both Houses of Parliament start their proceedings with daily prayer.

Lord Crickhowell: My Lords, as an Anglican, I worship in a disestablished Church—the Church of Wales. One must understand that there are parts of the United Kingdom where the Church is not the established Church.

Baroness O'Cathain: My Lords, I am very aware of that fact and thank my noble friend for bringing it to my attention.
	There are things that are required by the law of our country, such as Christian teaching and assemblies at schools. Remembrance Day services are an essential part of public life. When national disasters happen, they are always marked by a Church service, as we saw recently. In the United Kingdom, our culture, laws, democratic institutions, architecture, literature, art and science have all been profoundly influenced by Christianity and cannot be understood without reference to it, no more than any of us could understand Chinese art or any of the buildings that you see in Thailand without reference to Buddhism or the Chinese religions. The Christian faith has played a major part in the many great social reforms of our history, such as the creation of schools and hospitals, the abolition of slavery, the improvement of working conditions and the protection of children.
	Along with the coronation oath, the blasphemy laws are an important expression of principle: that the name of Jesus Christ is above any other name. As the Bible records, God exalted him to the highest place and gave him the name that is above every name. Moreover, the blasphemy laws today are essentially a defensive measure. No one will be put in prison for breaking them, unlike the religious hatred offence proposed in the Bill.
	It is the symbolic nature of the blasphemy laws that secularists object to. If that were not so, they would not show such interest in repealing the law on blasphemy, given that it is rarely used in practice. I sometimes fear that the campaign to remove the blasphemy laws is part of a wider agenda to remove all association between the state and Christianity and any reference to the only true God in public life.
	It is sometimes wrongly claimed that a law on blasphemy is incompatible with the European Convention on Human Rights. In fact, several unsuccessful challenges to blasphemy law have come before the European Court of Human Rights in recent years. In the 1996 case of Wingrove v United Kingdom, the court held that this country's blasphemy laws were compatible with Article 10(2) of the Convention. The court stated:
	"The extent of insult to religious feelings must be significant, as is clear from the use by the courts of the adjectives 'contemptuous', 'reviling', 'scurrilous', 'ludicrous' to depict material of a sufficient degree of offensiveness. The high degree of profanation that must be attained constitutes, in itself, a safeguard against arbitrariness".
	We are right to have a blasphemy law. There is good evidence that many ordinary people identify with the Christian faith and many Christian moral values. I have said on several occasions in your Lordships' House that the 2001 census found that 72 per cent of the UK population identified themselves as Christian. Clearly, the state and individuals have embraced secular values and beliefs in many areas, but the UK is not a secular state, and its people are generally theists who believe themselves to be Christians. Even the Guardian newspaper's editorial, following the publication of the census, stated on 28 February 2003:
	"This is a Christian country simply in the unanswerable sense that most of its citizens think of themselves as Christians".
	The truth is that every society that seeks cohesion has laws that enshrine its most fundamental beliefs. Blasphemy law falls into that category and protects our shared values. Any reform or abolition of the blasphemy laws cannot be looked at separately from the constitutional role of Christianity in the state. I oppose the noble Lord's amendment.

Lord Phillips of Sudbury: My Lords, it is extremely rarely that I disagree with the right reverend Prelate the Bishop of Oxford, but I shall do so briefly this afternoon. I hope that he will reconsider some of the main strands of his opposition to the amendment so clearly and well moved by my noble friend Lord Avebury.
	The right reverend Prelate said that he did not see a connection between religious hatred and blasphemy and that therefore it was inappropriate to make the amendment to the Bill. There is a connection, in that blaspheming is one way of expressing and fomenting hatred. He also said that this was not the time to introduce this reform into the Bill—the noble Lord, Lord Wedderburn, spoke about that at some length—but I believe that this is the time.
	The law of blasphemy, as the right reverend Prelate admitted, is more or less a dead letter. It is nearly 30 years since we last had a prosecution, and when we had one it promoted more confusion than light. As a Low Church ecumenical Anglican, I believe that, if anything, the law is now an encumbrance to the Church, and against the spirit of the age, which is one of extreme liberality of view and expression of view. In a strange way it works against the Church, in that it gives some people the notion that it cannot stand on its own feet and fight its own corner as other faiths and organisations have to do. I see no good argument for keeping it in place except the traditional one. I am a traditionalist: a good tradition knows when to steal away.
	For those of us who find the Bill as originally drafted unacceptable in creating an offence of promoting religious hatred, this is a perfect opportunity for the Church to sacrifice this legislative bauble to the greater cause; to find a common position with other faiths, particularly Islam at this time; to claim no special protection; to say that we stand with you, the same under law as you are; and to proceed from there. There are public order laws to prevent the worst infractions of order and decency. Such a gesture would resonate throughout the Church community and among the public at large.

The Lord Bishop of Oxford: My Lords, before the noble Lord sits down, I would like to reiterate that I agree with him in principle. Would he not agree that, although what he said applies to paragraph (a) of the new clause, paragraph (b), which states that,
	"any distinct offence of disturbing a religious service or religious devotions",
	could not be simply be abolished? Much wider consultation with people of other faiths would be required to consider if it should remain in some amended form.

Lord Phillips of Sudbury: My Lords, I am grateful for that intervention. I apologise for not making it clear that my remarks were addressed to the first part of the amendment.

Lord Renton: My Lords, the noble Lord did not refer to the third item here:
	"the abolition of any religious offence of striking a person in a church or churchyard".
	What are his views on that matter?

Lord Phillips of Sudbury: My Lords, I am grateful to the noble Lord, Lord Renton, for his intervention. I repeat: my remarks were addressed to the first part of the amendment and not the section to which he refers.

Baroness Whitaker: My Lords, may I add one voice to the amendment? I did not add my name to fourth place because I hoped that someone from the Benches not represented by those who tabled the amendment would do so. I believe there is a broad consensus outside the House for change.
	My noble friend Lord Plant gave far more eloquently than I can all the reasons why the amendment ought to be supported. I understand the point made by the right reverend Prelate the Bishop of Oxford on timing. I ask the Minister to tell us what the Government can say in respect of consultation with the bishops and others on the matter?

Baroness Flather: My Lords—

Lord Stoddart of Swindon: My Lords, I give way to the noble Baroness, Lady Flather.

Baroness Flather: Thank you. I had not intended to speak to the amendment, but having listened to the debate I need to say something.
	First, the blasphemy law is out of date. Would we sit down today to consider a blasphemy law for any religion? No, we would not. Secondly, the Church of England does not require the law. The Church is strong enough and important enough not to need such protection. This is a Christian country. Its religion is accepted by the state. It is not a secular state, although there are many people in this country who do not realise that there is a state religion. We are moving towards a loosening of the ties between state and Church. That will benefit both bodies. There was a time when the state and the Church badly needed each other to keep order. That is not the case today. The Church of England does not need this archaic blasphemy law to protect it.

Lord Stoddart of Swindon: My Lords, I am usually on the side of the noble Baroness, Lady O'Cathain, but not on this occasion, I fear, because if this question of blasphemy is not dealt with, and dealt with now, there will be a continual niggle between the Christian Church and other Churches. It is important that that niggle is removed. Only by removing the blasphemy laws can we remove it.
	A number of speakers, including the noble Lord, Lord Clinton-Davis, have said that this Bill is not the right vehicle for these amendments, but if it is in order within the Long Title, it is a perfectly legitimate thing to do. All sorts of Bills are amended in the Commons and in this House because amendments can be got in within the Long Title. Noble Lords should not be seduced by the view that the Bill is not an appropriate vehicle. It is. The amendment is perfectly legitimate, and now is the time for this matter to be settled. As the noble Lord, Lord Wedderburn, said, that would then give the House of Commons the opportunity to have a go at it, too.
	There is another reason why we should deal with this matter tonight. We all welcome the remarks and the position set out by the right reverend Prelate the Bishop of Oxford. He has indicated, as did the noble and right reverend Lord, Lord Carey, the former Archbishop of Canterbury, that the Church of England itself is ready for abolition of the blasphemy law. It is true that they say, "Not yet, not through this Bill", but if they agree in principle with abolition, and that that would assist in achieving peace, if I can put it that way, between the religions, why not consider it and vote for it today? I realise that there are only two Bishops on the Bishops' Bench, but perhaps a few telephone calls could go out to bring in others to support the amendment. I hope that we can reach a conclusion on this matter and we should thank the noble Lord, Lord Avebury, for introducing the amendment.

Lord Slynn of Hadley: My Lords, I am not persuaded by what has been said so far: that the crime of blasphemy no longer performs any useful purpose. But it is wholly unacceptable that it should be confined to the Christian religion and, perhaps, it is even more unacceptable if it is confined to the Anglican Church.
	The stronger arguments at the moment are not in favour of abolishing the crime altogether, but considering its application to at least the three Abrahamic faiths. That is the issue that should be debated in depth, not simply abolition. For that reason, although I do not often disagree with the noble Lords, Lord Avebury and Lord Lester, I oppose the amendment.

Lord Wedderburn of Charlton: My Lords, before the noble and learned Lord sits down, perhaps he will clarify his position. Would he therefore exclude any similar criminal liability in respect of those who do not have faith in any religion? Would they be in an unequal minority?

Lord Slynn of Hadley: My Lords, that is exactly the sort of question that could be discussed if we were looking at the expansion of the crime.

Lord Lester of Herne Hill: My Lords, is the noble and learned Lord aware that that argument was considered and rejected by the three-judge divisional court of Lord Justice Tasker Watkins and by the European Commission of Human Rights in the Salman Rushdie case, on the ground that it would be divisive, arbitrary and anomalous and capable of causing division between Muslims and Christians to extend an obsolete offence to all religions?

Lord Slynn of Hadley: My Lords, from many years at the Bar and as a puisne judge, I am used to my arguments not being accepted by a member of the Court of Appeal.

Lord Mackay of Clashfern: My Lords, the noble Lord, Lord Wedderburn, spoke of the doctrine of "unripe time". That has a place in some situations, but it is particularly important not to try to do too much in one Bill. It has been generally recognised that there has been a good deal of confusion about exactly what the Bill proposes. If the amendments tabled by the noble Lord, Lord Avebury, are encompassed in the Bill, the confusion will be even greater.
	In so far as the point made by the noble Lord, Lord Plant, is concerned, it seems perfectly possible for people to understand that the reason for rejecting the common law offence of blasphemy, were this amendment agreed to, was that the Bill replaces that law, whereas the Government have been very careful to point out as often as they can that it is quite different. The other point is that the foundation of the argument advanced on behalf of those not protected by the racial discrimination law is that it protects Sikhs and Jews in a way that it does not protect the other religions, including Christianity. That is one of the bases on which this Bill has been put forward.
	Those issues are not simple, and to complicate them in this way would be highly undesirable. I feel certain that if this amendment were agreed to, many would think that we had embarked on a very different course from that on which the Government believe they have embarked and on which we spoke earlier. I may be wrong, but I had the impression that this was the Government's view in dealing with suggestions of amendments about blasphemy before.
	The second and third branches of these amendments require a good deal of consideration. One of the most damaging offences committed at the moment is desecration of religious cemeteries. Although the offences referred to in the amendments are not quite that, they are quite similar. I counsel caution in extending the scope of this Bill at this juncture.

Lord Avebury: My Lords, is the noble and learned Lord aware that the common law offences in paragraphs (b) and (c) have not been used within living memory and that plenty of modern offences exist that enable the prosecution of people committing acts of desecration and violence in cemeteries or churches?

Lord Mackay of Clashfern: My Lords, I am very well aware of that. I am also aware that there is a statutory position for getting rid of obsolete legislation—by means of a Law Commission recommendation. All I am saying is that the amendment risks causing confusion.

Lord Hunt of Wirral: My Lords, another advantage of the Bill in its amended form is the ease with which we can discuss an issue as important as blasphemy. We are greatly indebted to the noble Lord, Lord Avebury, who has long campaigned on this issue, in delivering what I thought was a tour de force, aided and abetted by the noble Lord, Lord Lester, with his tour d'horizon.
	We have had a very balanced debate. Some wise words of caution have been uttered. We have heard a powerful case for arguing that the rather aged law against blasphemy should be reviewed as part of the new settlement in this troubled area of the law. Does the Minister believe that the law of blasphemy can now coexist with the freedom of expression clause in this amended Bill or, indeed, with any slightly improved version of it?
	As noble Lords will know, some saw in the Government's original Bill a vehicle not for abolishing the law of blasphemy but for extending it to religions other than Christianity. I believe that that shadow has now passed, and it is entirely right that we should now consider what settlement is appropriate and sustainable in this area in a highly diverse and liberal society. I am not saying that blasphemy has had its day but, in view of the clear view already expressed in this House on the question of freedom of expression in religious matters, I think that the burden of proof is now with those who wish the blasphemy laws to remain rather than those who would abolish them.
	We have heard some very persuasive speeches on either side of the argument. My noble friend Lord Renton made a very good point about paragraph (c) of the amendment, which concerns,
	"any religious offence of striking a person in a church or churchyard".
	The right reverend Prelate the Bishop of Oxford referred to paragraph (b) concerning,
	"any distinct offence of disturbing a religious service or religious devotions".
	I am sure that the noble Lord, Lord Avebury, is right to say that other areas of the law cover that, but I think that the fact that he seeks to abolish not only blasphemy and blasphemous libel but also these other offences justifies my noble and learned friend Lord Mackay of Clashfern in saying ,"Let's tread carefully".
	The noble Lord, Lord Clinton-Davis, had a point when he talked about taking time and proceeding with caution in such a traditional area. My noble friend Lord Crickhowell made some very good points to justify pausing for a few moments before proceeding, and the noble Viscount, Lord Bledisloe, also made a number of valid points. The noble Lord, Lord Wedderburn, summarised the position by referring to the doctrine of "unripe time"—a phrase that has been mentioned several times. It is a wonderful, glorious phrase. It is actually a complete paradox or oxymoron because time is never ripe, although many who have expressed views in the past have thought that it is.
	My noble friend Lady O'Cathain made a very well argued speech, pointing up a number of issues that we must consider. Although the noble Lord, Lord Phillips of Sudbury, referred only to paragraph (a) and implicitly conceded that we also have to think carefully about paragraphs (b) and (c), I think that, mainly due to the intervention of the right reverend Prelate, the balance of argument has been on the side of consultation.
	Although my noble friends will be voting in accordance with their conscience on those matters, there is some merit in pausing to consider what, in essence, the right reverend Prelate enunciated—namely, a red signal to this amendment but a green signal to the principle. We have to pause for a moment to try to work out what that means. I suppose it means that we should take a little time carefully to think through what we are doing; or it could mean that the Bishops' Bench want a little time to think through what their advice will be.
	I do not think the argument that this is not the Bill holds up. In its truly amended form, it deals with this issue. Therefore, the noble Lord, Lord Avebury, has every right to say that this is the moment on which we have to reach a decision. Speaking for myself, however, I find it difficult to vote in favour of the amendment in the face of the red light from the Bishops' Bench and, indeed, some of the good speeches made by my noble and learned friends. On balance, therefore, I would side with caution and consultation, just as we went with caution and consultation about the whole text of the Bill a few moments ago.
	I hope that consultation can be meaningful and speedy. The Government have said that they want their Bill, and that they have instanced the manifesto commitment. Surely, however, particularly in the light of this debate, there is a good argument for saying that we ought now to take the time to get this Bill right before we return it to the other place. I do not see the need of rushing to a date for Third Reading. Rather, as my noble friend Lady Carnegy of Lour said earlier, there is an argument perhaps for having a recommittal of the Bill, to go through it line by line in Committee. Why is there this rush? It is surely much more important that we get this right than we move speedily to get it wrong.
	These issues are so important that I hope that the noble Lord, Lord Avebury, having initiated a good debate, will be content to wait for a further period of consultation before moving to a vote. In the mean time, I leave it to my noble and learned friends to exercise whatever decision the House may be asked to take on the grounds of their own conscience.

Baroness Scotland of Asthal: My Lords, I am glad that I did not rise to my feet more quickly. I did just as the noble Lord, Lord Hunt of Wirral, wanted—I paused. He has just summed up this debate with great skill, and saved me, I hope, the burden of inflicting what I would have said upon the House.
	I agree with the noble Lord about caution and consultation. However, I say as clearly as I can: not in this Bill. The noble and learned Lord, Lord Mackay of Clashfern, was right when he emphasised the Government's clear desire that this Bill should not be seen as a substitution for the blasphemy laws. There would be a deal of confusion if the two became conflated in the way that is suggested.
	We have had an interesting and extensive debate. The hour and 20 minutes we have spent enjoying this debate has been well spent. We have ranged over the full course of the dispute. The noble Baroness, Lady O'Cathain, clearly said that it is needed. Others said that it may be needed, but that it needs to mutate. That is clear from the speech of the noble and learned Lord, Lord Slynn of Hadley, and the comments made by the right reverend Prelate the Bishop of Oxford, among others. If we know one thing about this area, it is that we do not currently have agreement. That says something very powerful. The Government recognise the importance of these issues but, like the right reverend Prelate the Bishop of Oxford, do not believe that this is the appropriate time to consider the abolition of blasphemy.
	For the purposes of completion, I say to my noble friend Lord Clinton-Davis that blasphemy was, in fact, ruled out of scope in the Commons. It came back in because, as noble Lords will know, amendments are not discussed in that way. There is an issue as to whether it is in or out of scope, therefore, but it is quite proper that we debate it at this stage. So while we are grateful for the consideration given to this matter by all noble Lords today, by noble Lords in the Select Committee in 2003 and earlier by the Law Commission, we are aware that there has not been wider consideration of this matter. It is particularly important, given the emotive nature of the issues, that they receive full parliamentary scrutiny, especially in the light of the fact that public opinion is also divided on the subject.
	My right honourable friend the Home Secretary has also made it clear that the Government are not prepared to legislate on blasphemy without first consulting with a range of faith and other interests. Many leaders from faiths not protected by the law on blasphemy see the symbolic protection for religion as important. My right honourable friend the Home Secretary is also keen that any legislation in this area should take place with the full involvement of the Church of England. In the past, there has been confusion between incitement to religious hatred and blasphemy and we should try to put an end to that confusion. Therefore, I am keen that we do not add to it by addressing both issues in the same Bill, especially as we try to chart a rather tortuous path through some of the difficulties with which we are currently faced.
	The Government believe that incitement should be bedded down before moving on and looking at the detail of blasphemy. Therefore, although I am extremely grateful to the noble Lord, Lord Avebury, for raising these issues, I say, in the words of my noble friend Lord Wedderburn, that the time is not ripe. On this occasion, the phrase is correct. We have moved a long way, but we cannot quite say that we have considered all views and that this is the time for the abolition of blasphemy. I hope that the noble Lord will not find it necessary to test the opinion of the House, either now or before the Bill leaves this House.

Lord Avebury: My Lords, at the risk of boring your Lordships, I would like to clear up the question that has been raised by several noble Lords on the offences in paragraphs (b) and (c). The noble Lord, Lord Renton, the noble Viscount, Lord Bledisloe, the right reverend Prelate the Bishop of Oxford, in an intervention and the noble Lord, Lord Hunt, in winding up all mentioned these two common law offences which have fallen into disuse for centuries. I referred to the Law Commission's report of 1985 and I remind your Lordships that it refers to statements in Hawkins' Pleas of the Crown to the effect that,
	"'all irreverent behaviour' in churches and churchyards has been regarded as criminal. More specifically there is authority, by no means strong, for the proposition that it is an offence at common law . . . to disturb a priest of the established Church in the performance of divine worship and also, it seems to disturb Methodists and Dissenters when engaged in their 'decent and quiet devotions'".
	The cases referred to are R. v Parry of 1686 and R v Wroughton of 1765.
	The report goes on to mention that it is an offence,
	"to strike any person in a church or churchyard".
	The cases referred to there are Wilson v Greaves of 1757 and Penhallo's case of 1590.
	The offences in paragraphs (b) and (c) fell into disuse centuries ago and have been replaced in modern times by statutory offences such as common assault, for example, in the case of striking a minister in the churchyard. I hope that that will dispose of the point raised by several of your Lordships. I could also refer to the Select Committee's report, at paragraph 21, but I will not bother to quote that in detail because the point has been sufficiently made. However, your Lordships should allow that it was reasonable to put these other common law offences up for abolition at the same time as blasphemy.
	I am most grateful to all those who have taken part in this debate. It is right for me to observe that only the noble Baroness, Lady O'Cathain, and possibly the noble Viscount, Lord Bledisloe, opposed the proposition that blasphemy should be abolished outright. Every other speaker, including the right reverend Prelate the Bishop of Oxford and the noble Lord, Lord Hunt, speaking from the Conservative Front Bench, has said that it is ridiculous still to have this offence, but this is not the right place to abolish it.
	The Minister repeated what the Home Secretary has said elsewhere: that he does not want to move to legislate on the matter until there has been proper consultation. I do not know what we were doing for a year in the Select Committee. We took evidence from everyone: the Church of England, the Catholics, the Methodists, the Muslims, the Sikhs, the Hindus—you name it, they all came. We spent a whole year examining just this question. Now the Minister wants us to start on another round of consultation. That is an excuse for procrastination.
	As St Augustine said in The City of God,
	"da mihi castitatem . . . sed nomi modo"—
	"give me chastity, but not yet". The Minister says, "This is a wonderful idea, but we are not going to do it now". She invited me not to test the opinion of the House, but there has been sufficient interest in this debate for me to do so now.

On Question, Whether the said amendment (No. 2) shall be agreed to?
	Their Lordships divided: Contents, 113; Not-Contents, 153.

Resolved in the negative, and amendment disagreed to accordingly.

Lord Avebury: moved Amendment No. 3:
	After Clause 2, insert the following new clause—
	"ABOLITION OF CERTAIN RELIGIOUS OFFENCES (NO. 2)
	Section 2 of the Ecclesiastical Courts Jurisdiction Act 1860 (c. 32) is hereby repealed."

Lord Avebury: My Lords, perhaps I may be allowed a comment on that vote. I believe that the Minister will agree that it was worth putting the amendment to a Division because it demonstrated a radical change in the opinion in your Lordships' House since we last debated blasphemy. It is moving in the direction that I would like to see—that of total abolition—and we probably would have got there had there been a free vote on the Government's side of the House as there was on this side. I will leave the Minister to reflect on that and on whether it is appropriate to embark on yet another round of consultation to substitute for the work that has already been done at such great length by the Select Committee, as she acknowledges.
	Of all the statutory offences against religion that are left over from the 19th century and examined by the Select Committee on Religious Offences, the only one that has been used in recent years is Section 2 of the Ecclesiastical Courts Jurisdiction Act, which forbids,
	"riotous, violent or indecent behaviour in a church or chapel of any denomination, or in any place of worship certified under the Registered Places of Worship Act 1835".
	It is also an offence under this section to,
	"molest, let, disturb, vex, or trouble . . . any preacher duly authorised to preach therein".
	That extends also to ceremonies held in a churchyard or burial ground.
	The question is not whether churches, mosques or gurdwaras need the protection of the law against people who might disrupt their services or other religious activities but whether they should have some additional safeguards which are not available in secular premises, and, if so, whether this elderly statute is the right answer. As far as non-Christian places of worship are concerned, they do not appear to see the ECJA as useful considering that only a very small fraction of them have registered under the 1855 Act. It has never been used, to the best of our knowledge, in relation to any place of worship other than a church of the established Church. The Select Committee found it extremely difficult to obtain any statistics and the Home Office acknowledged that its figures were unreliable because of errors in the procedure for coding offences in the courts.
	The Home Office was unable to identify any of the cases behind the statistics. Separate inquiries by the Select Committee unearthed details of two convictions which were classified as ECJA but where charges of criminal damage had been preferred at the same time and the courts had ultimately convicted under that heading. The third case where details were available was the very well known one of Mr Peter Tatchell, who was prosecuted in 1998 for causing a disturbance in Canterbury Cathedral, I believe while the Archbishop was preaching. The stipendiary magistrate fined him £18.60, showing neatly what the court thought of the case. But if disturbances were considered serious enough to justify prosecution, they could be dealt with under the Public Order Act and, if the offence was found to be religiously aggravated, the offender would be liable on summary conviction to a sentence not exceeding six months' imprisonment.
	Since the Select Committee's report, the data for 2003 have been published showing that there were three prosecutions and one conviction during the year. Assuming that the initial charge was correctly recorded, the conviction may well have been for some other offence, as with the 2002 cases I have mentioned. We have no means of knowing. The Home Office is obviously not interested or it would have taken steps to collect the information when it was put on notice of the difficulties that were experienced by the Select Committee. The data for 2004 have yet to be published—they are due on 17 November—but the Home Office has kindly allowed me a preview and I can tell your Lordships that so far this year there have been 15 prosecutions, resulting in 10 acquittals, four findings of guilty—in two cases a fine was imposed, in one a community sentence and in one imprisonment—and one under the heading "otherwise dealt with".
	Churchwatch, an organisation that monitors offences of all kinds on church premises, believes that the ECJA is a convenient means of dealing with disrespectful conduct falling short of actual criminality, such as eating or smoking in church, men wearing hats or going bare-chested, or skateboarding in churchyards. Some churches have printed notices with the text of Section 2 and their own explanation of the meaning of the word "indecent", which they give to people engaging in such activities and ask them to leave the premises. They find that often this works. But they also acknowledge that the same result might be achieved by using printed copies of Section 4A of the Public Order Act.
	These minor breaches of good taste and decency have to be seen in the context of a general deterioration in standards of behaviour, including respect for places of worship and ministers of religion, and a steep growth in crimes against persons and property belonging to churches, which, sadly, has led to many being locked except during services. That is not a problem that we can deal with here by legislation, and certainly not by the archaic language of the ECJA, which is unfamiliar territory to most prosecutors and the public.
	The ECJA has been superseded by modern laws on criminal damage and public order. It is hardly ever used, as I have demonstrated, and it is not of sufficient consequence for the Home Office to bother keeping reliable statistics or enabling the cases to which they refer to be retrieved. This is a good opportunity for Parliament to remove a piece of clutter from the statute book. I beg to move.

Baroness Scotland of Asthal: My Lords, I thank the noble Lord, Lord Avebury, for raising this issue. As he has identified, Section 2 of the Ecclesiastical Courts Jurisdiction Act provides protection from low-level public mischief taking place in churches of the established Church to other registered places of worship. As a point of information, it is important that we recognise that 1,587 non-Christian places of worship were registered under the Religious Places of Worship Act 1855 at the time of the Select Committee's report. Therefore, they, too, are eligible under the ECJA for protection. Unlike blasphemy and a number of the other offences to which the noble Lord has referred in the past, this provision is used, as is demonstrated by the figures cited by the noble Lord.
	The Select Committee on Religious Offences heard evidence from the Director of Public Prosecutions that it provides a route to prosecution for some forms of undesirable behaviour which would not be covered by other parts of the law. So it is not otiose. Although prosecutions have been few in recent times, the Director of Public Prosecutions told the committee—I am sure the noble Lord will remember this—that it was used sufficiently regularly for it to be considered a useful offence. We are dealing with a single-issue Bill today and, as with blasphemy, we are very keen to have a single message and to convey it with clarity. It is for that reason that we consider it unhelpful to cloud the issue with further matters which may cause unnecessary confusion. It is quite right that these and some of the other issues to which we will turn shortly may well be properly the subject of further discussion, but not in this Bill.

Lord Avebury: My Lords, the Minister is right to cite the DPP's assertion that this offence provided a means of dealing with offences that were not covered by other parts of the criminal law. However, she omitted to add that the DPP, when challenged, also was unable to provide the committee with details of a single case where someone had been prosecuted for the offence. As I have said, when we looked into the matter we found that some of the offences were misclassified because the code number used by the courts began with three digits, which applied to some 50 or 60 other miscellaneous offences, and the clerks entering the details into the computer frequently made mistakes. Also, as I have explained, prosecutions under the ECJA were accompanied by charges brought under some other statute, and the statistics collected by the Home Office do not reveal what the ultimate conviction was for; they reveal only what the charges were. So if a person is charged with two different offences, and the main one happens to be under the ECJA, the figures are not corrected to cover the changes that may have been made during the proceedings.
	I continue to assert that not only is the offence used very rarely but that, where it is used, it could very well be dealt with by some other provision in the criminal law. I can see, however, that I am not going to persuade the Minister of that today. I shall reflect on what she said and I may well come back to the matter at Third Reading. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Dholakia: moved Amendment No. 3A:
	Page 3, line 10, at end insert "and shall include the desecration of symbols or sacramental objects that are important to such a group of persons"

Lord Dholakia: The amendment is to the schedule and would extend the meaning of religious hatred. The schedule states that,
	"'religious hatred' means hatred against a group of persons defined by reference to religious belief or lack of religious belief".
	My amendment would add the need to take into account the desecration of sacred objects.
	I say at the outset that my amendment does not reflect my party's policy, but I want to explain my concern about recent events that have done serious harm to the religious beliefs of our different faith communities. Two recent events demonstrate how inadequately we deal with hatred of this kind. Last week we learned that more than 40 Muslim graves were desecrated in Birmingham. It is easy to deal with such matters as criminal damage, or to use other legal means, but the underlying hurt does irreparable damage to our faith communities. The shockwaves of what happened in Birmingham were felt across the whole country.
	The second incident was reported in our national newspapers only yesterday. I am aware that the matter is under investigation by the Metropolitan Police, but suffice it to say that an allegation has been made by a Muslim man that a police officer desecrated his Koran by throwing it into a rubbish bin when arresting him. The incident is alleged to have happened last Monday in south London, and the man also alleges that he was assaulted while being detained at his home. Muslims believe that a copy of the Koran is sacred and must be treated with respect. Throwing it in the bin could be viewed as a grave insult amounting to desecration. I shall not go further into that case, but we await the outcome of the investigation undertaken by the Metropolitan Police.
	There are other examples that are hurtful to the community. All of us are aware of the alleged mishandling of the holy Koran where the US military confirm that it had identified five incidents in which the holy book was mishandled by American personnel at the Guantanamo Bay prison camp. The report sparked protests across the Muslim world. In Afghanistan, riots resulted in at least 15 deaths. I do not believe that we shall ever find out whether the holy Koran was flushed down the toilet, but it is not disputed that such incidents create extreme hurt to our Muslim community.
	There are incidents of pig heads being left outside mosques. It is only recently that prison officers who deal with Muslim inmates have understood how to handle the holy book. It is not uncommon that even the most gentle inmates become violent when their religious beliefs are hurt.
	Another incident relates to some Christian fanatics who vandalised a Hindu temple. Two young white men reportedly intruded into a temple service in Ealing Road, in London. One of the men snatched the microphone and shouted that there was only one God and that the congregation was stupid to worship a stone. They then shook the idol until it was broken. The Hindu community was deeply offended that its sacred images were desecrated by those two persons. Of course we could argue that there are powers to deal with religiously aggravated criminal damage cases. In this case the Hindu community said that it had lost confidence in the ability of the CPS to prosecute such cases. The community has a list of regular incidents from 1993 in which temples and festivals have been vandalised. Very few of such incidents have resulted in prosecution. Jewish cemeteries are regularly vandalised. Synagogues have been painted with swastikas and headstones covered with anti-Semitic graffiti.
	There are powers to deal with religiously aggravated criminal damage, but they fail to take into account the wider insecurity of communities that feel that their hurt is never clearly understood or dealt with. The Government were keen to tell the Muslim community about the Racial and Religious Hatred Bill, and we all know about the letter sent by the Home Secretary to the mosques in this country prior to the election. I very much hope that the Home Secretary will write a further letter to the mosques and temples saying what the Home Office is doing to protect the beliefs of religious minorities in this country. I beg to move.

Lord Desai: My Lords, I have great respect for the noble Lord, Lord Dholakia, but I am not sure that I support the amendment. I do not like the Bill, as is well known. It was supposed to be about believers, not about belief. We are trying hard not to overstep the mark by criticising or obstructing people's dislike of religion, but we want to stop them hating those who hold certain beliefs.
	The line is difficult to draw, but we know precisely the sort of thing that can happen. Once we start down that road it is hard to say what objects are held sacred. As a former Hindu I can imagine that a number of objects could be held sacred by a Hindu; there is no precise limit. Because of my lack of religious belief, I do not want to privilege books which, to me, are only books. They may be holy books to some people, but they are merely printed paper to me. If someone says that such printed paper is holy, sacred and so on, and that I cannot do something with it, my right to handle such books will be restricted because they happen to be religious books. I may want to do something that others may find insulting, but to me it would be only a book.
	Let us stop and think a little further. Are there not laws on the books already that allow people to be prosecuted for vandalising temples or destroying icons and figures? If someone feels deeply insulted by the way in which the holy Koran is treated, it may be a matter to consider, but it does not constitute hatred of a religious person. I do not want to go in that direction. Let us keep the Bill fairly restricted and narrow because it is bad enough as it is.

Baroness D'Souza: My Lords, perhaps I could remind your Lordships of the time in the early 1990s during the height of the Rushdie affair when Muslims thought it right and proper to burn copies of his novel The Satanic Verses and effigies of Salman Rushdie himself. Where would such actions fall under the amendment? It suggests that the amendment needs greater definition. Of course we all deplore the desecration of the graves that we have heard about recently, but the amendment is still too broad.
	Another area that might come under its aegis, which again is contentious, and which has certainly been tested in the US, is flag burning. I remember going to great lengths, along with many other people—some of whom are in your Lordships' House—to defend the burning of flags. It may be that we would fall on the wrong side of the law if the amendment were agreed to.

Viscount Bledisloe: My Lords, the amendment is undoubtedly well intentioned, but your Lordships owe some respect to the English language when legislating. How on earth can religious hatred include desecration? Hatred is a state of mind; desecration is a physical act. To say that hatred includes desecration is such a gross perversion of the English language that, however well intentioned the amendment, your Lordships should not put that remarkable phrase on to the statute book.

Lord Harris of Haringey: My Lords, I have considerable sympathy with the amendment moved by the noble Lord, Lord Dholakia. If we want the clearest possible evidence of religious hatred, it is the destruction, or desecration, of symbols or sacramental objects. I was party to meetings in Ealing about the experience the noble Lord mentioned. I am very well aware of the very strong sense of hurt that was felt about those actions because of the nature of belief and the nature of the objects which were destroyed and damaged.
	Given the debate in this House and elsewhere about how to define religious hatred, this is the most tangible way in which we can demonstrate that it occurs. For that reason, I hope that my noble friend will in her reply give careful consideration to the arguments. What causes frustration and a feeling that society and the criminal justice system care little about these matters is the fact that the only charges that could be brought under these circumstances are fairly minor ones of criminal damage, with no indication of the severity of the hurt that has been caused and no understanding of the feelings of the communities concerned about the hatred that is being expressed towards them and their beliefs.
	I have respect always for my noble friend Lord Desai. The Bill is designed to protect individuals rather than their beliefs. However, the amendment is not about beliefs but about the impact that those acts of desecration have on a large number of individuals. Having heard the very strong views expressed by several hundred people at the meeting I attended, I think that the Government need to look at this very carefully.

Lord Avebury: My Lords, there is no doubt that the offence of desecration arouses extremely strong feelings. We had plenty of evidence of that in the Select Committee. We must consider whether, as my noble friend hinted, the problem is one of adequate penalties under the existing law or of the difficulties that the police have in bringing cases to court. Criminal damage attracts a penalty of 10 years' imprisonment for the basic offence, which can go up to 14 years if the offence is religiously aggravated. The problem is not one of the inadequacy of the penalties that are available but of the difficulties the police have in catching the perpetrators of the offences described by my noble friend and bringing them to court.

Lord Harris of Haringey: My Lords, part of the difficulty is the way in which the courts react to issues of criminal damage. The examples cited at the meeting I attended were about the very minimalist penalties imposed on people who had committed acts of criminal damage which had caused enormous offence.

Lord Avebury: My Lords, the Home Office collects figures of offences that are racially or religiously aggravated and publishes them from time to time, but they are very difficult to get at. I have spent many a weary hour looking for them on the Home Office website. Can the Minister find some way of giving the statistics greater prominence so that the communities which are affected, as my noble friend described, have regular bulletins of information showing how many offences of this kind have been reported to the police, what happened to them and what sentences were passed?
	We know from the figures that I have already given your Lordships on the Ecclesiastical Courts Jurisdiction Act 1860 that the Home Office collects these figures. It can say how many cases were prosecuted and what penalties were imposed but it cannot describe the individual ingredients of particular offences. I urge the Minister to see whether something cannot be done to collect that information and make it more widely available so that at least some reassurance can be given to the communities which are affected that proper efforts are being made by the police and the Crown Prosecution Service to bring the culprits who do these horrible things to justice.

The Lord Bishop of Newcastle: My Lords, I, too, support in principle the amendment of the noble Lord, Lord Dholakia. It is important for the message and the recognition that this will give to our various religious communities up and down the land. Although the wording may need closer definition, it would be enormously reassuring to many people from different religious communities were the amendment to be included in the Bill. I give it my support and hope that the Government will look kindly on it.

Lord Hunt of Wirral: My Lords, I thank the noble Lord, Lord Dholakia, for giving us an opportunity to make absolutely clear our sense of revulsion at the evil acts that he described and our determination to root out that vile behaviour from our society. This has been an important opportunity to make our views clear.
	It might be helpful to see what would happen if the words proposed in the amendment were added to the Bill. New Section 29A, entitled "Meaning of 'religious hatred', would read:
	"In this Part 'religious hatred' means hatred against a group of persons defined by reference to religious belief or lack of religious belief and shall include the desecration of symbols or sacramental objects that are important to such a group of persons".
	That emphasises the point made by the noble Baroness, Lady D'Souza; we must be very careful about adding these words in the context in which they are proposed. That point was also made by the noble Viscount, Lord Bledisloe.
	Although I sympathise with what has been said by the noble Lord, Lord Harris of Haringey, I fall back on the wise advice of the noble Lord, Lord Desai. We may be straying beyond the intention for which the right reverend Prelate the Bishop of Newcastle quite rightly expressed his sympathy, but in considering these words, we would be extending protection—dare I even mention it?—to the swastika and various other evil symbols of a decadent past civilisation. I caution the noble Lord about the wording of the amendment while expressing total support for his objective, which I strongly endorse.

Baroness Scotland of Asthal: My Lords, I echo the comments of the noble Lord, Lord Hunt, on the sense of revulsion one has about such attacks. It is important that the noble Lord, Lord Dholakia, has expressed his personal view on these matters, because it underlines why we all recognise the importance of dealing with hatred, whether it is stimulated by virtue of race or religious belief. It is important, therefore, that we view the amendment in that light.
	I say with the greatest delicacy that to proceed with dealing with racial and religious hatred in a way that impacts on individuals, we need to be quite clear about separating objects from people. There are already a large number of offences which would bite on such acts of desecration and criminal damage, also enabling the court to deal much more trenchantly and effectively with the perpetrators. We have done that by giving the courts the ability to attack such behaviour if they believe it is racially or religiously motivated in an improper way. There is of course an issue about how to express our distaste for that in the way in which the courts deal with it and in sentencing. The Sentencing Guidelines Council will be empowered to look at all those issues. That may be the most appropriate place to deal with the matter.
	The amendment would effectively create a statutory offence of incitement to the desecration of religious objects. As I have said, to incite another to such activities could already be prosecuted. It would be very difficult to make the argument in public that it is people whom we really want to protect by virtue of this offence and not religion per se. While we believe that a maximum sentence of seven years' imprisonment is appropriate for those who seek to pit entire communities against each other, we doubt whether it is appropriate in the case of objects to give a similar protection.

Lord Lester of Herne Hill: My Lords, am I right in saying that the gangsters, the thugs—however one might characterise them—who desecrated 40 Muslim graves can, if caught, be prosecuted for a whole series of different offences and that, if they are convicted, their crimes could be regarded also as racially or religiously aggravated, for which they could be charged as well?

Baroness Scotland of Asthal: My Lords, the noble Lord is absolutely right about that. I am grateful to him for mentioning that a whole series of graves has been desecrated. We were deeply wounded by the number of Jewish, Muslim and other graves that were desecrated. All those desecrations cause great alarm and great fear in the affected communities because those graves are the graves of loved ones and should be the more precious for that.
	So I absolutely understand, bearing in mind particularly the events of the past few weeks and days, why the noble Lord brought this important matter before the House for debate, but this is perhaps not the most appropriate Bill for it, not least because, as the noble Lord, Lord Lester, quite rightly said, there are other means by which we could properly address this really quite disgraceful behaviour.

Lord Dholakia: My Lords, I am grateful to the Minister for her explanation and to all noble Lords who have participated in this debate. I am particularly grateful to the noble Lord, Lord Harris, who explained the feelings that are generated in communities by actions of this nature. It is not my intention to go further in this case, but I shall look in future legislation for an amendment of some kind that deals with the situation far more effectively than do existing powers. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Peyton of Yeovil: moved Amendment No. 4:
	Page 3, line 10, at end insert—
	"(2) In this Part—
	"religion" shall mean belief in a god or supreme being and worship of that god or supreme being, and "religious" shall be construed accordingly;
	"threatening" shall mean deliberately subjecting someone to justifiable and immediate fear of violence."

Lord Peyton of Yeovil: My Lords, I hope that I may be forgiven if I briefly say before I turn to my amendments that when the two Front Benches swap pieties at a difficult moment, I always feel that I am going to be lost and will probably be faced with a Bill and certainly with consequences which I do not welcome. I am sorry to say this to the noble Baroness, whom I admire immensely, but at the end of her remarks she left me nourishing the dark suspicion that where she was heading was back to the old Bill and presenting us with the Government's original intentions as declared in their manifesto.
	I have only one more comment to add to that: I have never been able to subscribe to the idea that any party manifesto deserves the status of holy writ that is normally accorded to them. They are dreadful documents. I recall with pain having once had something to do with one. I remember the aching boredom and the total frustration that accompanied the process. That anybody should elevate the results of a manifesto to the status of holy writ is beyond my imagination.
	Perhaps I may proceed very briefly to the amendments and say to your Lordships that, after this afternoon's proceedings, I hope to endear myself to your Lordships at least by my brevity. The amendments owe a great deal to the unfailing kindness of the Public Bill Office. I was extremely uncertain about the definition of "religion" and I am extremely grateful to the Public Bill Office for its usual courtesy, co-operation and help.
	I take the subject of the amendments very seriously indeed. If I am right in thinking that religion is part of man's age-long search for a better understanding of God, it is therefore surely an area which governments should enter only with the utmost caution and with greater respect than they are normally accustomed to showing to anyone except themselves.
	I have four points. First, I regard the fettering of expressions of opinion in any event as an encroachment on freedom which is usually wrong and almost always counterproductive. Secondly, to plead that it has been done previously, as did the noble and learned Lord the Lord Chancellor, compounds rather than excuses the offence. When the Lord Chancellor started to talk about gaps in the law, he made me think of a rather over-zealous dentist looking round the teeth of a patient to see whether any holes need stopping.
	Thirdly, the lack of a definition in the original Bill worried me. It contained expressions such as "likely to". The repetition of "likely to" in as little space as a single line made it too horrible a piece of legislation for me to wish to dwell on. I regard vagueness in legislation as asking for trouble. I hope that the Government, whatever else they may do, will not attempt to repeat phrases such as "likely to" in their next version of the Bill.
	I turn to the last of my detailed points. If discussion is going to be stifled, does one stifle it everywhere or just in some places? Does one leave Members of either House of Parliament free to say whatever they want and to be reported however likely to disturb their words may be, or is it intended to stifle discussion in your Lordships' House and another place?
	I conclude with this single comment: for a government—even a government who see themselves as wholly secular—to intrude and make criminal the expressions of opinion which were originally uttered or printed without any intention to provoke anybody is a monstrous intrusion and a piece of arrogance which I would find very hard to forgive. I await with some interest, and a little hope, the Minister's reply. I beg to move.

Lord Lester of Herne Hill: My Lords, I have considerable sympathy with the amendment of the noble Lord, Lord Peyton of Yeovil, but I am going to be very careful in what I say for this simple reason: I do not want to say anything which is likely to make it more difficult to reach an agreement with the Government along the lines that were suggested earlier today. Therefore I will make only a couple of points. Firstly, one should not seek to define religion by Act of Parliament. The Human Rights Act 1998 did not do so; neither does the European Convention on Human Rights. If this definition were to be regarded as appropriate to theistic religions, it would not be regarded as appropriate to, for example, Buddhism. As I understand it, that is not a theistic religion. That may be a boring and technical reason, perhaps an important one, but it is one which anyone who has followed the Charities Bill will understand. The Government eventually changed the whole approach on the meaning of religion in the Charities Bill to make clear that it included non-theistic religions, especially Buddhism.
	That is beside the point, because the main point which the noble Lord makes is that one should only criminalise freedom of expression where, in his words, there is,
	"justifiable and immediate fear of violence".
	That was the approach of Oliver Wendell Holmes, of Justice Brandeis and of Justice Cardozo in all the great American free speech cases. On one reading, it is also the approach under the European Convention on Human Rights. I have great sympathy for that point, and for limiting the scope of what we have to a justifiable and immediate fear of violence, or something resembling it. However, I believe that the amendments passed by your Lordships' House in Committee strike a fair balance between freedom of expression, freedom of religion, the right to equal treatment without discrimination, a fair criminal process and the principle of legal certainty and proportionality, and so on.
	I hope that the Minister will respond fully to the important speech made this evening by the noble Lord, Lord Peyton. However, speaking for myself, were the House to divide and accept the amendment, it would make it that much more difficult to secure overall agreement within the principles—and the three essential safeguards—that your Lordships' House has already approved.

Lord Desai: My Lords, I am reminded of the remark recently made by Madonna; that Tom Cruise could do what he liked, even if he wants to worship a turtle. It does not bother her if some people worship turtles as superior beings. The noble Lord, Lord Lester, anticipated something that I wanted to say. This definition of religion certainly does not cover Buddhism, Sikhism or Jainism. None of those three belief systems would be covered by a belief either in God or in a supreme being. In the case of Sikhs, they might actually worship a book—the Guru Granth Sahib—or, in the Jain case, a number of gurus. If we are to have a definition of religion, and whether we do is a matter for the Government to choose, I would wish for the definition to be cast much wider than it currently is. Certainly, it should cover all religions.
	I was once asked by someone, in an application for the Charity Commission, whether I supported Scientology being a religion. Since I believe anything can be a religion, I said "Yes". Therefore I wrote a definition that a religion was, more or less, a coherent set of inconsistent, irrational beliefs about the nature of the universe. The scientologists objected to my definition and asked me to withdraw the letter in their support. But there is, possibly, some point in defining religion, provided we can do it broadly enough so that all religions can be covered by it.

Lord Hunt of Wirral: My Lords, I rise strongly to support my noble friend Lord Peyton of Yeovil, who made some important points. I think that even he would admit that it is difficult to find a perfect definition. The noble Lord, Lord Lester, reminded me that in the Charities Bill—which we shall shortly be discussing—the Government attempt to define religion. Clause 2(3) of that Bill states that religion is to include:
	"(i) a religion which involves belief in more than one god, and (ii) a religion which does not involve belief in a god".
	It is difficult to find the right definition, as my noble friend has conceded. But that in no way detracts from the valid points that he made in a commendably brief and remarkably succinct speech—which, as I say, I strongly support. His reference to "likely to" was a particularly important intervention.
	I hope that my noble friend is wrong, and that the Minister does not still hanker after the old Bill. As I understand what she said earlier today, she is prepared, in a spirit of compromise, to accept the new infrastructure of the Bill—which has been agreed by this House in Committee—and will now seek ways in which to improve the wording. I hope she will be able to tell my noble friend that she accepts many of his points, and that they will be included as we deliberate on the best way forward. The noble Lords, Lord Desai and Lord Lester, are quite right. We must be mindful of those who so strongly believe in Buddhism, Hinduism, Jainism and a number of other key religions. My noble friend admitted that we must proceed with the utmost caution. Yet it is important that his points are answered in this debate, and continue to be answered in the discussions which lie ahead.

Baroness Scotland of Asthal: My Lords, the noble Lord, Lord Peyton, has set me a difficult challenge. I am to avoid piety and agreement in an egregious manner with Members on the opposite Bench and still answer his questions. I hope to be able to do that in a way which satisfies him. The Deputy Chief Whip tells me that it would be almost a physical impossibility for a Home Office Minister, of whatever complexion, not to hanker after the old Bill. But I can tell your Lordships that it is a temptation which I find very easy to resist, because I am a total realist and pragmatist about where we now find ourselves.
	The most important thing now is to try to chart a way through this issue and bring consensus. I hope that I outlined clearly in my comments earlier today that we have accepted the construct and framework set out by the view expressed by the Committee when we dealt comprehensively with those matters. We are looking with a great deal of purposeful energy at how we can express better the freedom of expression criterion so that it does not do violence to our ability to prosecute these offences. It should honour the real concern which was expressed all around the House—just as volubly, indeed, from our own Benches—that freedom of expression has to be preserved and promoted in a way with which others will feel content. There are more difficulties, and I have set out what they are. My hope and aspiration is that we will be able to mediate a way through them to arrive at consensus. That is certainly what we—each of us, as I understood it—have set our minds to achieving. So I hope that in that sense we shall be able to satisfy noble Lords.
	The noble Lords, Lord Lester and Lord Hunt, have already referred to the reasons why we believe that a definition would be unhelpful in this regard, and unnecessary. I am sure, as the noble Lord, Lord Hunt, made clear, that the noble Lord, Lord Peyton, accepts that his definition does not cover all the religions that are recognised as the major religions—and Buddhism has been mentioned among others.
	I agree with what was said about the European Convention on Human Rights. The definition advocated in this amendment is not as comprehensive or rigorous as the approach to the meaning of religion adopted by the courts in relation to the convention. That approach requires a religion that contains a coherent set of beliefs. All those are things with which I believe that we probably agree—and I know that the noble Lord's amendment is a very piercing probing amendment to ensure that I do not slip off the straight and narrow. I assure him that I know the direction of travel in which we shall have to go to settle this matter—if it can be settled—in a way that is honourable, fair and delivers what we would all wish to see.

Lord Peyton of Yeovil: My Lords, after such graciousness I can hardly keep my feet—I am slipping all over the place. I am grateful to all noble Lords who have spoken. On a point of definition, I have never been proud of any definition that I have expressed yet; this one was borrowed from the Public Bill Office, and I thought that it did awfully well for the occasion—it was quite enough. But as it is not likely to be immortal, I see no reason to apologise for it.
	I have one comment to make to the Minister, who is always so nice. She spoke about "we" looking with "purposeful energy". I could contemplate the Minister herself looking with purposeful energy at me or almost anything else, but the idea of some of her colleagues looking at things with purposeful energy frightens me greatly. Nevertheless, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Peyton of Yeovil: had given notice of his intention to move Amendment No. 5:
	Page 3, leave out lines 21 and 22.

Lord Peyton of Yeovil: My Lords, with this amendment, I had in mind a police constable—not necessarily a man of gigantic intellect—being confronted first with the legislation and having to puzzle out its meaning, forming a clear conclusion that an offence had been committed or was likely to be committed and then arresting someone without a warrant. That seemed to me a most improper and undesirable procedure and very dangerous for the police constable. In the circumstances, I hope that the Minister will reflect on what I have said.

[Amendment No. 5 not moved.]
	[Amendment No. 6 not moved.]

Charities Bill [HL]

Baroness Scotland of Asthal: My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Charities Bill, have consented to place their Prerogative and Interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
	I beg to move that this Bill be now read a third time.
	Moved, That the Bill be read a third time.—(Baroness Scotland of Asthal.)

Lord Bassam of Brighton: My Lords, it might be helpful before we get into the detailed consideration of the Bill to make a short statement on the vote that was held on 12 October on Report. Your Lordships will recall that the House voted into the Bill an amendment moved by the noble Lord, Lord Phillips, which removed the control of the Minister for the Civil Service over the terms and conditions of the staff of the new Charity Commission, substituting a provision that would allow the commission to determine the remuneration of its staff subject to an overall remuneration budget agreed with the Treasury. The amended provision is now paragraph 5(3) to a new Schedule 1A to the Charities Act 1993, which appears at line 41 on page 80 of the Bill.
	The Government have since had time to reflect and explore the effects and implications of that amendment. My understanding is that a significant effect of it may well be to remove from the Home Civil Service the staff of the new commission, with the exception of the chief executive, over whose terms and conditions ministerial control survives. That must in turn call into question the status of the commission under the amended Bill as a non-ministerial department. It was and remains the Government's intention that the staff of the new commission should be in the Home Civil Service, as the staff of the present charity commissioners are. I do not believe that the noble Lord, Lord Phillips, intended by his amendment to remove the staff of the new Charity Commission from the Home Civil Service. Accordingly, the Government will consider what steps they can take in another place to ensure that the commission staff will continue to be in the Home Civil Service from the moment when the provisions converting the existing commissioners to the new commission take effect.
	(9)I thank the House for bearing with me while I made that statement, but I thought it only right and proper, given that it was an amendment from your Lordships' House, that I explained the situation and some of the difficulties that it has created. I am prepared simply to say that those noble Lords who are involved in the debate are welcome to join, perhaps with myself or the Bill's Minister and officials, to discuss and reach a deeper understanding of the implications of the amendment. It is probably best left at that.

Lord Phillips of Sudbury: My Lords, I am grateful to the Minister for alerting the House to the problems that he explained. They bear a little thinking about, and I cannot confess to having taken in the whole plot at one hearing, but I am grateful that he has offered talks to see how nearly we can get to the amendment passed by the House on a vote, assuming that there is some other way of getting nearer to the wishes of the House. We look forward to those talks.
	On Question, Bill read a third time.

Clause 3 [The "public benefit" test]:

Lord Campbell-Savours: moved Amendment No. 1:
	Page 3, line 27, at end insert—
	"( ) In determining whether an independent school meets the public benefit test under this section, the Charity Commission shall have regard to any directions or guidance issued by the Secretary of State."

Lord Campbell-Savours: My Lords, in moving Amendment No. 1, I shall speak also to Amendment No. 6, which stands in my name.
	The amendments cover what in my view is the most controversial part of the Bill—that is to say, the charitable status of fee-paying schools.

Lord Swinfen: My Lords, the noble Lord said that he would speak also to Amendment No. 6, which is my amendment. Does he mean Amendment No. 5?

Lord Campbell-Savours: My Lords, I apologise, I did mean Amendment No. 5.
	I apologise for returning to this issue on Third Reading, but since we last considered these matters the Government have produced their education White Paper, which in my view has changed the climate in which this debate takes place.
	The problem at heart is that the Government believe that the public schools—including, for example, Eton and Harrow—are charities. I ask myself, "Who in the Government believes this nonsense?". In my 40 years' membership of the Labour Party, I have never heard it argued that Eton is a charity. The public do not believe it, and neither do Labour MPs, as they will inevitably express in a few weeks when the Bill hits the House of Commons.
	The charitable status of public schools brings charity law into disrepute. The fee-paying schools desperately cling on to that status for the tax benefits. It is perfectly reasonable for public schools to have tax benefits because they reduce the pressure on public expenditure, but charity status is the wrong vehicle to use to provide those benefits. If the fee-paying schools want tax benefits, they should come under separate provisions in the Finance Act in return for providing public benefit. We should just take them out of the area of charity law. The Bill does not do that, though; it leaves it to the Charity Commission to decide their public benefit contribution.
	A Charity Commission that has left Eton, Harrow and other public schools as charities over the years has a question mark hanging over it. Indeed, during consideration in the Joint Committee, I asked around in the charitable sector why it was that the commission, in the view of some, was so timid. I did not like the reply, but I will put it to the House. I was told that it was because the commission's management was riddled with people who have interests in private education for their own children, and they do not want to rock the boat.
	The truth is that I do not trust the judgment of the Charity Commission. They will duck the hard decisions on private education that are required, which brings me to my amendments. They are both about the need for political, parliamentary influence to be exerted on commission decisions in relation to fee-paying schools. Amendment No. 5 draws on the work of the Nathan committee, which made recommendations in 1950 about the future of charities. It recommended that the Charity Commission and the education Minister share responsibility for the charitable status of fee-paying schools, the reason being that the charitable, voluntary and endowed schools and the technically non-charitable LEA-maintained schools were part of the same national system. That position was written into the Charities Act 1960. As a result, until 1973, the Secretary of State for Education was charity commissioner for educational charities, and shared responsibility for those schools with the Charity Commission.
	In 1973, the government changed the law and removed that provision—primarily, many believe, in order to emphasise that there should be two separate school systems: one of fee-paying education out of the reach of government for some, and a free education under government supervision for the others. In retrospect, that was a significantly deliberate political Act of Parliament. In 1974, a change of government took place, and a Select Committee of the Commons unanimously recommended that fee-paying schools should retain their charitable status only if they could prove public benefit. That then became my party's policy.
	Today the Nathan principle is as compelling as it was in 1950 and 1960, and it is against that background that the Government, like their 19th-century predecessors, are seeking to create in their White Paper the concept of a national system of education that is more intact. I remind the House that, during the 19th century, governments of both parties assumed that fee-paying schools were part of the state system, and many committees and commissions were set up to keep a state system for education intact.
	Only yesterday the Times reported that a fee-paying charitable school in Liverpool was to become a maintained non-fee-paying school—a healthy development. That school has decided to become part of the non-fee-paying state system. In the circumstances of the new policy, it is absurd that the Charity Commission, which has little educational expertise, should, with the courts as a longstop, be effectively the only arbiter of the place of new maintained schools in the state system.
	(5)Nathan was absolutely right: whatever the status of schools, the Secretary of State responsible for the national system of education should be given reasonable purchase on the shape, framework and operation of a new developing state system. My amendment would restore the shared responsibility between government and the Charity Commission that existed before 1973. I believe that my argument in this regard is compelling, and if your Lordships do not recognise that, I hope that the Commons does when it comes to consider these matters.
	Amendment No. 1 concerns the height of the public benefit hurdle that fee-paying schools will be compelled to surmount if they wish to maintain their charitable status. The issue has been well rehearsed in previous stages, and I do not want to go down that route. The Government's brief, for which my noble friend is required to argue, has been unconvincing. It is an immensely political issue, and one that dominates debates on education in our party. Many obvious and genuine charities resent their charitable status being entangled by the Government with that of Eton, Harrow and the other fee-paying schools.
	The proposition that this criterion should simply be left to a quango—the Charity Commission—and the courts, bodies whose individual members cannot be considered disinterested parties in the light of their personal commitment to private education, is offensive. Decisions about the nature of public benefit should be enshrined in statute by Parliament, particularly by the elected House of Commons. If the latter amendment does not appeal to your Lordships, I hope that the Commons will see the sense of it. I beg to move.

Lord MacGregor of Pulham Market: My Lords, as in previous debates on this subject on this Bill, I declare an interest as the deputy chairman of the Association of Governing Bodies of Independent Schools. We have already discussed at some length the position of independent schools, and I do not intend to go over the previous ground in any detail. The only way I will follow the noble Lord is in being as brief as I can about the issues.
	I strongly disagree with the noble Lord about the value of charitable status and the way that independent schools look at it. He put particular emphasis on the financial benefits. The tax benefits amount to something like £100 million a year. In past debates I have gone into rather greater detail about the financial aspects, but suffice it to say that, if one takes into account all the other aspects, broadly speaking, the independent schools contribute twenty times that to education as a whole and to the public good. So one may well ask, "Why put such emphasis on the financial benefits?".
	The noble Lord conceded the financial benefit point and suggested that this could best be dealt with in a Finance Bill. We have debated this in Committee, and he knows as well as I do that that is no commitment. It would perhaps be an inappropriate place to deal with the issue. Given the nature of the problems facing the Chancellor with his fiscal deficit, I doubt whether it would happen. We cannot go down that route.
	There is another point. If the financial benefits seem to go the other way, why does the independent sector value charitable status so much? There are two basic reasons. It has a strong sense of public good, and charitable status underlines that. There is another practical problem. If charitable status is lost, there would be difficulties regarding all the assets that belong to independent schools. That would threaten the whole nature of independent schools. I wish that the noble Lord had not talked only about Eton and Harrow. I could have talked about a much wider range of independent schools that make a major contribution to public benefit—indeed a substantial proportion of pupils now attending independent schools receive some form of bursary help.
	That leads me on to my second point about public benefits. I want to underline the fact that the independent schools entirely accept the position in the Bill about public benefit. Increasingly over the past 10 years, more and more has been done by the schools to provide public benefit in all sorts of ways. I have elaborated on those before and do not intend to do so now. They take the matter very seriously.
	I have two reasons for speaking against the amendments, and they follow the general principles that have run through our debates on the Bill. First, we have constantly emphasised—in relation not just to this sector but to all charities—the importance of flexibility in defining public benefit, as social needs and conditions change. That is best preserved as it is in the Bill. Secondly, we have stressed above all the independence of the commission. We have resisted setting out detailed definitions of public benefit in the Bill, and we should not therefore legislate for a Secretary of State's direction on one charitable activity alone for that one sector. Those two principles are undermined by the amendment.
	Ministers have rightly insisted on those principles throughout our debates. As this is possibly my last contribution to the Bill, I would like to pay tribute to the Minister, my noble friend Lord Hodgson of Astley Abbotts and the noble Lord, Lord Phillips of Sudbury, for the way in which they have conducted the passage of the Bill. It has been a model of how the House of Lords can contribute greatly to the legislative process. The Minister has been superb in the way he has listened to the debates and dealt with points and as a result the Bill is greatly strengthened.
	I agree with the two principles that Ministers have insisted on in the Bill, and I hope that we shall stick with them.

Lord Hodgson of Astley Abbotts: My Lords, before I contribute I declare an interest, as this debate concerns independent schools. I have previously declared my interest as a governor of Shrewsbury School, one of the great public schools of the Public Schools Act 1868.
	The general issue has been discussed many times, most notably at our last meeting on a slightly broader amendment tabled by the noble Lord, Lord Phillips, which was tested in the House and was not successful. I continue to support the Government. They have reached a delicate balance—not a fudge—on the issue. It stands on three pillars. First, we are all agreed on the need for an independent Charity Commission. The Government have done much to buttress that independence particularly with new subsection (4) in Clause 6. We made a further buttressing change—I know that the Minister did not like it—on the last occasion to paragraph 5(3) of Schedule 1. We have made the Charity Commission as independent as we can. That is the first leg.
	The second leg is that this independent body has responsibility for establishing and enforcing the public benefit, and there is the requirement that there is proper consultation in Clause 4(4). It has a playing field to work on—and a level playing field at that. It is unfair of the noble Lord, Lord Campbell-Savours, to say that commission members will duck hard decisions before they have even set out down the road. He says they have little educational experience. We are talking about a range of charities here. He is over-harsh.
	The third leg is that we require the public benefit test to be complied with continuously and not just at the commencement of a charity's life. A level playing field has been established. In his first amendment, the noble Lord wants to reach down and tilt that playing field in respect of one narrow subsection that has caught his eye—or should I say "his ire"?
	The second amendment shows precisely why, we believe, the Charity Commission should be completely independent and free from political interference of whatever kind. I accept that the noble Lord's remarks would fit into a debate on education policy rather than a debate on charities. They do not belong to the issues that we are discussing tonight. With the help of the Government and with amendments from the noble Lord, Lord Phillips, and from us we have got the Charity Commission in an independent and strong position. I hope that the Government will stand firm and reject the amendment.

Lord Phillips of Sudbury: My Lords, when I heard the noble Lord, Lord MacGregor of Pulham Market, congratulate the Government on their handling of the Bill, I was going to say, "No wonder. They have not laid a glove on his beloved independent schools". Then he went on to say how much I had contributed, and I would not now think of making such a remark.
	There has been—I will use the word—a "fudge" over the issue in the Bill. I have twice proposed an amendment of the purest moderation that would have required the Charity Commission to have regard to the effect on access to independent schools in its consultations and considerations, particularly in respect to their fee-charging structure.
	I am not going to agree with the noble Lord who has tabled the two amendments. Hereafter I am going to hoist the Government with their own petard. Their constant refrain to my amendment was: "It's not necessary, old boy. It's all there, and of course the Charity Commission will do precisely as your amendment would have them do". There will be extremely close scrutiny from some quarters to see whether the commission does that.
	I am particularly dissatisfied with the amendments as tabled. The noble Lord, Lord Corbett, and I served on the joint scrutiny committee, and its members were very unhappy with the formulation on public interest. The noble Lord has made some fair points on that matter.

A Noble Lord: My Lords, it was the noble Lord, Lord Campbell-Savours, not the noble Lord, Lord Corbett.

Lord Phillips of Sudbury: My Lords, I apologise. I am going mad. I meant the noble Lord, Lord Campbell-Savours. He does not even look like the noble Lord, Lord Corbett.
	The reason that I do not support him is that he remarked that he did not trust the Charity Commission. I certainly do not trust Secretaries of State from one party to the next to issue directions on this sensitive issue. We could have a zig-zag course as we have had over central policies over decades between the two main parties and, who knows, my own party. I find the notion that a Secretary of State can simply weigh in and give directions on management and other matters very unsatisfactory, more unsatisfactory than leaving the matter to the Charity Commission in whom I have more faith than the noble Lord. He was wrong in saying that commission members had no educational experience; they have a lot by now. It is true that they took over educational charities only 20 or 25 years ago, but they have a lot of experience. They will have to engage people with the necessary experience in order to undertake the consultation that is cast upon them under the Bill.
	I sit down an unhappy man, but one who will look closely at what happens, particularly if we have been sold a pup by the independent schools. We all talk about them as if they were a single monolithic group; they are not. We have heard here and in Committee from the best of them—the high master of Manchester Grammar School, Jonathan Shephard of the Independent Schools Council. They genuinely, I have no doubt, want to pursue the public interest path, and they have done that—admittedly, under the prospect of legislation of which they were wary. If it is the case that, once they have the Bill more or less in the shape that they want, they rest on their oars and the schools that have done nothing thus far do even less tomorrow, we will have cause to question our deliberations on this part of the Bill and we should return to the issue and seek to do something about it.

Lord Bassam of Brighton: My Lords, I first thank the noble Lord, Lord MacGregor of Pulham Market, for his kind comments about us all. Rather like the noble Lord, Lord Phillips, I was thinking, "Well, yes, perhaps the noble Lord would say that, wouldn't he?". The generosity of his view is well meant, and we have tried hard to make this as consensual a process as possible. That is not to say that we always agree on things and, in a sense, the amendment throws light on an area where there has been some considerable disagreement—properly so, because it is a difficult debate where many trenchant views are expressed. The noble Lord, Lord Campbell-Savours, put his view well, eloquently and forcefully—and rightly so.
	That reaches the core of an important issue. It has certainly been the case, as several noble Lords have said, that one of the strong themes regarding the future of the Charity Commission is a desire to ensure that it is independent from the Government. There may be some difficulties about the formulation, as expressed in the amendment, to which I referred, and some work will need to be undertaken to see what can best be done about that position.
	It is undoubtedly the clear will of your Lordships' House and of the Government that the commission's independence has been firmly established by statute and is highly desirable. As other noble Lords have said, the amendments tabled by the noble Lord, Lord Campbell-Savours, are entirely at odds with that overall theme, because they clearly state that the directions or guidance be issued by the Secretary of State, rather than the Charity Commission itself, which we can fairly trust to be of independent mind. I heard what my noble friend Lord Campbell-Savours said about it being an organisation that was, I think he said, "riddled" with people sympathetic to public schools. That is rather a harsh judgment and is unfair. In my experience, the Charity Commission takes a powerful, independent and professional view. I do not believe that personal views come into the way that it operates in the manner that the noble Lord's comment suggested. I know that those were not his own views; he was reflecting on something that others had said.
	In considering whether or not an organisation meets the public benefit test, the commission should, and will, as the Bill is drafted, act in an independent manner. The idea that a government Minister should give directions about whether a charity in a particular class meets the public benefit requirement is unacceptable and should be unacceptable in the framework that we have set out. It would undermine the notion of a credible independent commission and undermine the principle that charitable status is decided objectively under the law.
	It has been said before—it is the Government's view—that existing and proposed charities should be subject to examination by the commission of their public benefit credentials on the basis of a public benefit requirement established under the Bill. The noble Lord, Lord Phillips, raised the issue that he put in earlier amendments of whether the charging of a fee would be taken into consideration in terms of access and so on to demonstrate public benefit. We take the firm view that that is a proper consideration, and no doubt the commission will reflect that in the way that it publishes its guidance and how it clarifies the public benefit test.
	The commission has said that it is able to apply the current law under the existing framework, as amended by the Bill, by removal of the presumption of public benefit that religious education and poverty relief charities currently enjoy. The commission has already published illustrative guidance on public benefit and on how it intends to go forward with guidance and the application of the law, once the Bill is enacted. It will apply to all organisations that aspire to charitable status and to existing registered charities. Independent schools will be no exception to that. Some of them might not meet the public benefit requirement, but there is no justification for singling them out, or any other class of charity, for the purposes of ensuring that the commission must have regard to ministerial directions or guidance when it considers their public benefit. Nor is there any justification for allowing the Secretary of State, as my noble friend's Amendment No. 5 would appear to envisage, to intervene in the commission's regulatory supervision of charitable independent schools.
	In summary, there is nothing that attracts us to either of my noble friend's amendments or that is justified. On reflection, I thought that he gave us an interesting historical introduction, and I have little doubt that there will be a debate on the subject in another place.

Lord Campbell-Savours: Hear, hear!

Lord Bassam of Brighton: And, my Lords, I am sure that, to my noble friend's credit, he will ensure that there is. I cannot accept his amendments. They are inconsistent with our policy approach to the Bill and, for the reasons that I have set out, they would seriously compromise the independence of the Charity Commission, which is something that we are not prepared to entertain.

Lord Campbell-Savours: My Lords, I am grateful to my noble friend for his response. I put to him that we are just fudging the issue. One day a Labour government will have to sort it out. I am grateful to other Members of the House. I am under no illusions that my amendment would find much support in the establishment, whether it be in the department, the commission, the independent sector or the House, but I keep on pressing it, because I believe strongly that I am right and that the matter should be dealt with.
	I tell the noble Lord, Lord MacGregor of Pulham Market, that we can carry on sparring over the issue for ever, but it must be sorted out at some stage. However, it was the noble Lord, Lord Hodgson, on the Front Bench, who interested me by talking about the need to make a political decision. A political decision has been made. That is why nothing is changing. The political decision is to be found in the debate that surrounds the introduction of the Education Act 1973, which transferred the entire responsibility in these areas from the Secretary of State to the commission. That was a political decision taken to avoid interference by government in this area of education.
	The noble Lord, Lord Phillips of Sudbury, also suggested that he might be witnessing a bit of a fudge. I am grateful to him for the way that he has valiantly fought on the question of public benefit through all stages of the Bill. I hope that people outside have noticed the notable part that he played during those proceedings. I hope that his views on the effectiveness of the commission in education stand the test of time. He believes that they will. I do not. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 5 [Special provisions about recreational charities, sports clubs etc.]:

Lord Phillips of Sudbury: moved Amendment No. 2:
	Page 4, line 24, at end insert "unless and until it registers as such, in which event it shall cease automatically to be a registered sports club"

Lord Phillips of Sudbury: My Lords, I hope that I can move this amendment speedily. This is the same amendment as I advanced in Committee and on Report. For those noble Lords who want the reference, we last debated it on 12 October, as reported at cols. 321 and 322 of Hansard. The point of the amendment is to make it easy and smooth for a CASC—a community amateur sports club—to register as a charity without having first to dissolve and then reform as a new charity.
	The argument that the Minister advanced against that on the previous occasion was twofold. He admitted that the amendment would smooth the transition from a CASC to a charity, as indeed it will. But the objections were, first, that there could be a tax charge on a charity becoming a community amateur sports club, and, secondly, that that would therefore create practical difficulties for a charity that follows that route.
	My amendment covers only the route I indicated: a CASC wanting to become a charity. It does not affect a charity which would become a CASC. Indeed, for a charity to become a CASC would be an odd thing to happen in any event but to do it—and the Minister was right—it would have to wind itself up; the disposal of its assets would not be liable to tax; it would have to dispose of its net assets for charitable purposes, and that would not, or might not, allow it to transfer all its assets to the new CASC. If it did, the assets would have to be ring-fenced so that they could be used only for charitable purposes by the CASC.
	This amendment will not affect many CASCs because most of them will not want to become charities. The main category of CASCs that might want to become charities are those who want to get major grants from those grant-making bodies that can only make grants to registered charities. That might induce a CASC to seek that new and slightly different status. I beg to move.

Lord Bassam of Brighton: My Lords, I can see from what the noble Lord, Lord Phillips, has said that I shall have to expand a little on my explanation of the difficulties to which his amendment might give rise for charitable amateur sports clubs wanting to convert to CASC status.
	There is no doubt that the transition from CASC to Charity Commission would be smoother with this amendment, but in the way in which we are looking at it, we believe that it would create difficulties for a charitable amateur sports club that wished to become a CASC.
	Under the amendment, a club registered with the Charity Commission cannot be a CASC or become one. The effect of the amendment is that every time a charitable club moves towards, and attempts to assume, CASC status it is pulled back into charity by the amendment tabled by the noble Lord, Lord Phillips, which provides that, as a charity, it ceases automatically to be a CASC. So in order for a charity to become a CASC it would need to cease to be a charity first, so that there was a gap in time between its ceasing to be a charity and its subsequent assumption of CASC status. That would enable it to enter CASC territory as a non-charity.
	The problem is that, at the point at which it ceased to be a charity, a deemed disposal of assets for capital gains tax purposes would occur, with an associated tax charge that arises because, at that point, the club is not yet sheltered by the tax reliefs available to CASCs.
	I appreciate that it is somewhat hard to follow. I find it hard to trace too, but it explains why, although there is an attraction to the amendment, it would be unworkable in practice. It is for that reason alone that we continue with our resistance.

Lord Phillips of Sudbury: My Lords, I am grateful for the Minister's response. I think this is a classic example of where we have not done very well because we should have had a discussion on this outside this Chamber. Everything the Minister said is wrong, and I must leave it at that—this is the end of the game for us. Maybe this is an issue that I can take up with officials with a view—if I am right in thinking that the reasoning is wrong—to having the provision inserted in the Bill at the Commons because it is inoffensive enough. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 7 [The Commission's objectives, general functions and duties]:

Lord Bassam of Brighton: moved Amendment No. 3:
	Page 7, line 26, after "must" insert ", in appropriate cases,"

Lord Bassam of Brighton: My Lords, this should not detain the House for too long. It is an amendment standing in the name of my noble friend Lady Scotland. On Report, on 12 October, your Lordships' House agreed to an amendment which would give the Charity Commission the duty, in performing its functions, to have regard to the desirability of facilitating innovation by or on behalf of charities. The noble Lord, Lord Phillips, proposed to qualify that duty so that the commission could exercise it only in "appropriate cases". He had, I understand, the support of the National Council for Voluntary Organisations. The amendment to which I now speak gives effect to my undertaking to consider incorporating the noble Lord's proposition into the commission's new duty. I am grateful to the noble Lord and I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, I understand what the Minister is driving at here and I do not want to strike a sour note at this hour. I am concerned about how one decides what are "appropriate cases". My original objective in pressing for the inclusion of the desirability of facilitating innovation was to ensure that the Charity Commission, with its new role and powers, did not put the voluntary sector into an unnecessary straitjacket. As I have said several times in the past, regulation is by its very nature risk averse—I have been a regulator in the City myself and I know how quickly one becomes risk averse. By contrast, the voluntary sector needs to be flexible and innovative to meet the needs of our rapidly changing society.
	It is interesting that the Better Regulation Task Force has just produced a booklet called Better Regulation for Civil Society: Making life easier for those who help others. Page 20, which is about social innovation, says:
	"Regulation is often based on standard service models and can therefore threaten social innovation by those VCOs that provide innovative services, for example to people with complex and multiple needs that other organisations frequently cannot meet. For example, social care is regulated because of market failure. This means that people receiving social care often have imperfect information on what care is available and its quality. They also have little purchasing power to exercise choice. It would clearly be unwelcome if some kind of 'one-size-fits-all' social care regulation were to prevent VCOs from developing and providing innovative care and greater choice."
	That is the sort of thing that I was concerned about. With the original clause, I did not think that risk-averse box-ticking would prevail over the need to think creatively. With these slightly weasel words "appropriate cases"—who decides it?—I am not so sure. So although I understand what the Minister is driving at, I would like him to reassure me further about how this subsection will be exercised.

Lord Phillips of Sudbury: My Lords, by contrast, I am delighted with the amendment and grateful to the Government. I would like to reassure the noble Lord, Lord Hodgson, that actually this prevents what he fears—that is to say the one-size-fits-all approach. There are classes of charity that are not about innovation at all, for example, almshouses, which I mentioned last time—there are a lot of categories. I think this is useful and I hope that the Minister will reassure the noble Lord.

Lord Bassam of Brighton: My Lords, I hope that I can reassure the noble Lord. I am rather surprised that he has raised the issue in the way in which he has. What we have tried to do—unusually with this piece of legislation—is be more flexible, imaginative and focused. It should work where it is appropriate; that is what we are after. I take the noble Lord's point about regulation driving us towards risk aversion but this is a sensitive regulator that acts intelligently. I am sure that this clause will be applied sensibly and that the Charity Commission will have listened to what the noble Lord said—and to all of us who have been involved in the debates on this issue—and will take very careful note. We do not want it to go wrong.

On Question, amendment agreed to.

Lord Swinfen: moved Amendment No. 4:
	Page 7, line 31, at end insert—
	"7. In performing its regulatory functions the Commission must act fairly and reasonably, and with regard to the interests of charity beneficiaries and other people who are stakeholders in charities."

Lord Swinfen: My Lords, I start by thanking the Minister and the chairman of the Charity Commission for their letters, which have been most helpful. The purpose of the amendment is to require on the face of the Bill that the Charity Commission must act at all times, when regulating charities, in a manner which is fair and reasonable and to require the commission to have regard to the interests of the people involved in charities, with particular emphasis on the beneficiaries, as well as a charity's material assets, which, as far as I can see, is all that is covered under the 1993 Act.
	The requirement for fair and reasonable behaviour by the commission has had much support within the House, and many of your Lordships have said that they want these words in the Bill. The reasons given so far by the Government for not accepting the amendment, or a similar one, appear both surprising and difficult to understand. The issue identified by the Minister on 12 October—that is, that the commission,
	"would not change its behaviour as a result of the addition of these words, and so the amendment would have no practical effect"—[Official Report, 12/10/05; col. 335.]
	is not one that the amendment seeks to address. There are two issues of importance which it does seek to address. The first, critically, as the noble Lords, Lord Phillips of Sudbury and Lord Dahrendorf, and others have argued, is that it is the perceptions and concerns of charities—especially the smaller ones, whose activities have been seriously adversely affected by commission regulatory conduct in the past—that need to be addressed.
	The second issue relates to the High Court judge's ruling in the Little Gidding Trust case, where the judge, on grounds of shortening the hearing, ruled that he would not take into account whether the commissioners had acted fairly and reasonably in the making of the orders which were the subject of trustee appeal on grounds that the commission had acted with bias, unfairness and unreasonableness in the making of them.
	It is not sufficient for the Minister to attempt to deal with this case law precedent by saying that he understands that the judge so ruled in order to shorten the hearing. Had the Charities Act 1993 placed upon the commission a specific duty to act fairly and reasonably, the judge would have been obliged to take into account the grounds of the appeal and how the commission had acted. I took part in debates on the Bill that produced that Act. Such a measure was not considered necessary at that time but, in my view, it is obviously necessary now when taking into account the Charity Commission's behaviour, as I have described to your Lordships.
	When, on 12 October, we last debated the issue of the commission's duty towards a charity's people, the Minister said several things—at col. 342 of the Official Report. He said that this amendment was unnecessary because it was not possible for the commission to comply with the new objective, which requires the commission to promote the effective use of charitable resources without taking into account the needs of beneficiaries. He suggested that the commission's new duty to increase public trust and confidence in charities would require it to take account of a charity's stakeholders. Such conclusions seem to me to be extremely tenuous and difficult to support from the wording in the Bill.
	The Minister further suggested that the commission's new customer network consultative group will influence the commission to take account of charity people. The requirement on the commission to be accountable and transparent, even if it takes customer service seriously with its new feedback group, has nothing to do with the need to stop the commission occasionally acting in a cavalier and damaging way towards a charity's people. A hand-picked feedback group addressing a commission agenda can, and will, be ignored.
	Finally, the Minister referred to the commission's duty to be accountable. A government agency may be transparent and accountable in a general way to a Minister or Parliament but still sometimes do outrageous things in individual cases to the organisations and people that it regulates without being accountable to them for its actions.
	The Minister's claims are too general. He refers to the general behaviour of the commission in its broad role. Some of the commission's past behaviour can give no confidence that that is sufficient. There is a real need to focus the minds of the commission's staff on an unequivocal statement that they are required to take account of the people and be fair and reasonable when they are pulling a charity apart.
	Is the Minister perhaps afraid that some downtrodden trustee or beneficiary might successfully sue the commission? Offering the ethereal accountability of the commission to the state is totally inadequate. What is needed is accountability to the individual through the courts, and this amendment will help to provide it.
	The charity sector remains founded on morality, and charities expect standards of regulation likewise founded on a moral bedrock of decency. The commission's behaviour has not always met this high standard, and it is necessary that it should meet it and be seen to meet it. I beg to move.

Lord Bassam of Brighton: My Lords, the noble Lord has addressed this issue at length on previous occasions with different amendments, but this amendment seeks to bring together two separate amendments that he tabled previously. The first part concerns a duty for the commission in performing its regulatory functions to act "fairly and reasonably", and the second concerns a requirement for the commission to have regard to the interests of beneficiaries and other stakeholders.
	We have discussed the "fair and reasonable" part of the amendment on five separate occasions and I feel slightly shamefaced in offering the same argument. Nevertheless, it remains the case that we consider that part of it to be unnecessary because the Charity Commission has always recognised that it has a duty to act in a fair and reasonable way.

Lord Phillips of Sudbury: My Lords, I am sorry to interrupt the noble Lord but he will be interested to know that when I visited the Charity Commission this morning, it had in its reception area free postcards. On them, in very large print, was the word "Fair", so perhaps the noble Lord's amendment is not so unnecessary after all.

Lord Bassam of Brighton: My Lords, presumably, it does not have the word "reasonably" on another postcard. That is very good.
	For the benefit of those who have not heard the Government's position before, I will place it on the record. We completely agree with the noble Lord, Lord Swinfen, that the commission should act in a fair and reasonable way. We listened to the views expressed in the House on previous occasions and were moved to include a duty on the commission to have regard to the principles of best regulatory practice when performing its functions, so far as relevant. Those principles are set out in the Bill for the avoidance of doubt. They are that regulatory activity should be proportionate, accountable, consistent and transparent and should be targeted only at cases in which action is needed. In our view, those words express more than adequately the concept of fairness.
	I repeat the assurance that I gave on previous occasions that we are under no doubt that the commission is under a duty in administrative law to use its powers reasonably. If Parliament thought it necessary to give the Charity Commission this duty, as I have said in the past, the implication taken would be that the commission did not have the duty at present, but I do not think that that can be argued to be the case. The commission is fully aware that it already has this duty—it has a postcard. On Report, the noble Lord, Lord Swinfen, himself said:
	"Many noble Lords, like me, believe these words need to be placed on the face of the Bill because the commission has not always behaved in that way".—[Official Report, 12/10/05; col. 331.]
	As the commission is already sure that it has such a duty, and as the principles of best regulatory practice are now in the Bill, we do not think that the amendment would have any practical effect on the commission's behaviour. If the noble Lord believes that the commission has acted unfairly and unreasonably in any case, then I argue that this is not the way to rectify that. The Charity Commission's own internal complaints procedure, the Independent Complaints Reviewer and the Parliamentary Ombudsman are already the routes through which charities may challenge the commission on grounds of maladministration. While touching on that, it is perhaps worth reminding the House of the recent annual report produced by the Independent Complaints Reviewer, who received and considered only 32 complaints in 2004, covering 110 individual allegations of maladministration, 86 per cent of which were not upheld.
	I turn again to the noble Lord's suggestion that the commission must have regard to charities' beneficiaries and other stakeholders, which we have also debated previously. The commission already has a general object, contained in Section 1(4) of the Charities Act 1993, to:
	"act in the case of any charity . . . as best to promote and make effective the work of the charity in meeting the needs designated by its trusts".
	This means the needs of the beneficiaries. A quick glance at the commission's new objectives in the Bill should also show that the interests of beneficiaries sit at the heart of the commission's work. The fifth objective requires the commission to enhance the accountability of charities to beneficiaries. The fourth objective requires the commission to promote the effective use of charitable resources, which will result in charities being able to help their beneficiaries in the most effective way.
	I mentioned earlier that the second part of the noble Lord's amendment is harmful and unacceptable. It suggests that the commission should have equal regard to a range of unspecified stakeholders in charities as to the interests of beneficiaries. That cannot be right. Charities, after all, exist to serve their beneficiaries, and the commission as regulator is ultimately there to protect the interests of current and future beneficiaries of charities. If there was a situation, for example, in which a charity's beneficiaries and the charity's staff had conflicting interests, then it would be right for the commission to have the interests of the beneficiaries at the heart of its considerations and whatever it undertook to do. This amendment would seem to require the commission to give equal weight to promoting interests of other people with a stake in the charity. This would represent a fundamental change in the role of the commission, one which is not at all desirable.
	I can understand why the noble Lord tabled the amendment. We strongly believe that, while the first part is unnecessary, the second is unacceptable. For these reasons, despite his admirable persistence, I cannot find favour with the noble Lord's amendment.

Lord Swinfen: My Lords, the Minister says that the first part of the amendment is unnecessary. It may be. It should be. He makes me think, however, of the situation in a mine where the managers put safety precautions in place, but the people at the coalface do not follow them because they are intent on producing as much coal as they can, in order to increase their bonuses. I may be being unfair to the mining industry, but I am using it as an example.
	I am sure that the people at the top of the Charity Commission wish to be seen to be acting in a fair and reasonable manner. As I have pointed out on numerous occasions—the Minister says five; I have lost count, myself—there have been numerous instances in which they have not acted in a fair and reasonable manner. However, the main effect of this amendment would be that they would be fair and reasonable to charity beneficiaries. I appreciate that adding:
	"and other people who are stakeholders in charities",
	is over the top. Quite obviously, it is possible that employees or trustees could be acting in a dishonest or illegal way. Therefore, I will not press the amendment this evening. I am certain that it will be taken up in another place, however, and hope that the Government will look at it more reasonably at that time. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 5 not moved.]

Lord Swinfen: moved Amendment No. 6:
	After Clause 8, insert the following new clause—
	"CHAPTER 2A
	THE CHARITY INDEPENDENT COMPLAINTS REVIEWER
	:TITLE3:The Charity Independent Complaints Reviewer
	After section 2 of the 1993 Act insert—
	"THE CHARITY INDEPENDENT COMPLAINTS REVIEWER
	2A THE CHARITY INDEPENDENT COMPLAINTS REVIEWER
	(1) There shall be a complaints reviewer to be known as the Charity Independent Complaints Reviewer (in this Act referred to as "the Reviewer").
	(2) The function of the Reviewer will be to investigate complaints against the Charity Commission's performance of its regulatory role and where appropriate make financial awards of compensation against the Charity Commisison, whether limited consolatory payments or unlimited payments for financial loss, and make recommendations.
	(3) Except where the Reviewer finds the complainant has acted frivolously, vexatiously or unreasonably, the complainant shall not be required to pay any part of the costs of the investigation.
	(4) No complainant shall be required to use an internal complaints procedure of the Charity Commission, the Ombudsman or the courts before the Reviewer will consider the case and any consideration by the Reviewer will not prevent the case subsequently being considered by the Ombudsman or the courts.
	(5) The Reviewer shall be appointed by the Lord Chancellor on such other terms as he, after consultation, shall think fit.""

Lord Swinfen: My Lords, the purpose of this amendment is to set the existing Independent Complaints Reviewer on a statutory footing, who is at present appointed by the Charity Commission to look at complaints against itself, with the following significant alterations to the current arrangements: first, to allow the reviewer the power to award financial compensation, instead of merely being able to recommend it; secondly, to allow the reviewer to award compensation to a complainant for financial loss arising from a failure by the Charity Commission, as well as the existing consolatory payments for maladministration; thirdly, to minimise delay in assessing the reviewer by not requiring that the complainant use the Charity Commission's internal complaints procedure first. Together, these changes will bring about a genuinely independent statutory alternative dispute resolution procedure, which will provide an alternative to the High Court as a route to access justice by charities, trustees and others.
	The reason for this amendment is to create a truly independent mechanism for charities, trustees and others to be able to challenge the Charity Commission when they think it is guilty of maladministration or acting unfairly, unreasonably or disproportionately, and to obtain financial compensation for maladministration and financial loss. At present, the Independent Complaints Reviewer is a creature of the commission, which may be ignored if the commission so chooses. By requiring the ICR not to take cases until they have been through the commission's own complaints procedure, the commission has been able to use the complaints and the ICR process as a mechanism of delay—in one case, I am told, in excess of five years.
	The ICR is forbidden even to recommend to the commission the payment of compensation where a charity has suffered real loss as a result of the commission's unfair, unreasonable or disproportionate behaviour. The ombudsman routinely refuses to take up cases where there is still the legal possibility of pursuing the commission through the courts. As we all know, this is a ruinously expensive process for charities and trustees, who have no recourse to legal aid.
	I understand from a letter that the Charity Commission sent to me when I asked how often it had paid compensation that, once, the expenses of Lincoln County Council for Voluntary Services—about £3,500 plus VAT—were paid by the Charity Commission. Another case was pointed out to me where a receiver and manager was appointed on a contingency basis. As the charity had no cash assets at the time, an indemnity was offered. The costs, however, were eventually met by the charity. So, in fact, there is only one occasion when the Charity Commission has paid out of its own pockets.
	In answering this proposal, the Minister drew comparisons between the advantages of the ombudsman and the proposed ICR, concluding that, on the whole, the ombudsman route is advantageous. I do not doubt that it is, but it is rarely available to charities in practice. In replying to the amendment on 12 October, as reported at col. 382 of Hansard, the Minister drew attention to the fact that the Parliamentary Ombudsman can deal with commission maladministration and can recommend financial compensation for real losses. Since the introduction of the Charities Act 1993, the Parliamentary Ombudsman has investigated only eight complaints about the commission's conduct, upholding three of them and recommending financial compensation in two cases. For most complainants, his door has been firmly closed.
	The Minister may be right when he suggests, at col. 381, that the Parliamentary Ombudsman could do financially better for a charity or trustee than a statutory ICR. There are other reasons, however, for having a statutory ICR beyond financial compensation. It would have, and be seen to have, independence from the commission, would be likely to provide a quicker turnaround of complainants and would have greater experience of charities and the commission. At the moment, it looks to me as though we have a prosecutor, jury and judge all rolled into one. I beg to move.

Lord Phillips of Sudbury: My Lords, the noble Lord, Lord Swinfen, deserves considerable praise for his tenacity over his attempts to get a more practical and effectual remedy for those who feel hard done by by the Charity Commission. In the course of the debates, we have talked at length about the different layers of remedy and the fact that the Parliamentary Ombudsman is a more available source of recompense and assistance than perhaps had been thought. Although this House has done well on many aspects of the Bill, this one has not received the focus that it deserves. In responding, will the Minister assure the House that the Charity commission will at least put out a new, simple, revised leaflet for those who want to make complaints, which tells them exactly where they may go and what they may do? That would help, because there is plainly a lot of misunderstanding about the extent and availability of the existing remedies.

Lord Bassam of Brighton: My Lords, I have listened carefully to the noble Lord, Lord Swinfen, in the many debates on this matter and read again the debate on Report. I appreciate not only his tenacity but that the noble Lord feels very strongly about this matter. We do not want to deny people a way of challenging the commission when they feel that it has not acted properly, misled them, or given them advice that led them to make decisions that they would not otherwise have made. There must always be a proper way of challenging the commission. The noble Lord, Lord Phillips, has been one of the drivers behind the creation of a tribunal to ensure that there is a more accessible form of redress. I take the point made by the noble Lord, Lord Phillips, about the need to ensure that there is proper and adequate information about the means of redress. I shall certainly speak again with the commission officials to that point because the information needs to be not only in leaflet form, but on the website and the various other means in which it can be communicated.
	The noble Lord, Lord Swinfen, was concerned about three main issues regarding the existing arrangements. The first was the delay in accessing the ICR or the ombudsman because of, in the case of the ICR, the need to go through the commission's internal complaints procedure, and in the case of the ombudsman, the need to go through an MP. In relation to that, he also said that the ombudsman routinely refuses to investigate cases where there is the possibility of High Court redress—a point that he repeated in his latest remarks.
	The second main issue that the noble Lord raised was the need for a power to award compensation as well as consolatory payments, and the third issue was the independence of the reviewer from the Charity Commission. We do not accept that the current system involves an unacceptable delay to complainants. Under the current arrangements, complainants are asked to raise their complaint with the commission in the first instance before taking their complaint to the existing ICR if still dissatisfied. It is good practice that departments have the chance to respond to complainants themselves in the first instance. The Charity Commission's customer service team dealt with 103 complaints in the year 2004–05. In the same period, the ICR received 32 complaints. Clearly, many of those who were dissatisfied with the commission's standards of service were satisfied by the commission's response to their complaint when they first raised their complaint with the commission. It is right that the ICR is there for those complainants who are not satisfied with the initial response from the commission. We are not aware of any evidence that this system is unacceptable to complainants or that there is real feeling that the commission's internal complaints procedure is a barrier to access to the ICR.
	At Report stage on 12 October the noble Lord also expressed concern that in order to access the ombudsman a complainant has to go through his or her Member of Parliament. Again, we are not aware of any evidence that this is a problem in practice, as confirmed by the noble Lord, Lord Phillips, during our Report stage debate. While it is absolutely fair that those with a real cause for concern have easy access to the ombudsman, it is important that only genuine cases reach the ombudsman. The noble Lord also mentioned the need in some circumstances for charities to obtain a certificate from the commission before going to court, the cost to charities of going to court and the difficulties charities have of representing themselves against the Attorney-General. He doubted that such arrangements make for easy access to justice.
	We must distinguish between the differing roles and remit of the court and of the ombudsman. The court looks at legal decisions of the commission. We have some sympathy with the concerns of the noble Lord about the difficulties of challenging the commission in the High Court. That is why we are setting up the Charity Appeal Tribunal, in order to make challenging the commission's legal decisions easier. However, this is a separate issue from complaints about the commission on the grounds of poor service or maladministration. The ombudsman looks at maladministration, not legal decisions. The ombudsman would be able to look at any maladministration of the commission even in a case which had been decided by a court or a tribunal on a point of law. As the noble Lord, Lord Phillips, said last time, there is no need for High Court remedies to have been exhausted in order for the ombudsman to get involved. However, if legal action had been commenced, the ombudsman would not intervene while it was in train.
	The second issue raised by the noble Lord, Lord Swinfen, when moving his amendment on Report was the need for a power to award compensation as well as consolatory payments. I said in our debate on that occasion that the ombudsman can recommend any level of redress if the complainant has evidence to show that he or she has experienced quantifiable financial loss directly as a result of the commission's maladministration and I gave an example to demonstrate that this does happen in practice. As it turned out, on the day of our debate, the ombudsman recommended financial redress of £100,000 in a particular case.
	We do not see any need to duplicate this existing power by setting up a second body for that purpose and I note that the proposed statutory ICR in this amendment would have the power actually to make financial awards. I am not sure how that would work unless the ICR had a budget comprised of public funds. We think that the current arrangements—whereby the ombudsman recommends payments and the departments pay out of their own funds—works and does not need change. If the commission chose to ignore a recommendation of the ombudsman to provide compensation, the ombudsman would refer the commission to the Select Committee on Public Administration, so there is a strong incentive for departments to make the payments recommended by the ombudsman.
	The final point which concerned the noble Lord was the need for a reviewer who is independent of the commission. The ICR is indeed appointed by the commission. However, in common with other similar offices, her terms of reference underline her independence and authority. In addition, there is no evidence that in practice the ICR can be shown to act in a way which is not independent, for example, by showing bias to the commission or by toning down recommendations. In the year 2004–05, the ICR received only one complaint about her service from a Charity Commission complainant. That complaint was related to dissatisfaction with the review findings, rather than the way in which she had dealt with the matter. The ombudsman is appointed by the Queen and reports directly to Parliament and provides an independent final recourse for complainants who have not been satisfied by the investigations of the commission or the ICR into their complaints.
	I also mentioned last time that in the recent annual report the ICR herself doubts whether a "potentially overlapping" office as proposed in the amendment would add anything for the citizen "other than confusion". I do not believe that there are the gaps in the present arrangements as the noble Lord has suggested in his amendment. The current ICR provides a different but valuable and valued addition to the ombudsman service.
	I am sorry that I was not able to convince the noble Lord last time that the current arrangements are satisfactory. I apologise to the House for going over at length why we feel that the situation is best served by the current arrangement. I hope that my explanation this time, although perhaps not to the noble Lord's liking, has helped him through some of the arguments that we see as obstacles to choosing the course recommended to us by the noble Lord.
	I accept that the amendment is moved in good spirit and is well-intentioned, but it would add confusion and would not provide much, if any, benefit to potential complainants.

Lord Swinfen: My Lords, the suggestion by the noble Lord, Lord Phillips of Sudbury, of a new, clearer leaflet by the Charity Commission is probably a good idea. I am glad that the Minister welcomed that. I admit that I had some difficulty hearing a great deal of what the Minister said—and, indeed, of seeing what he said, because he had his head down reading his brief, which is perfectly understandable. That is not his fault. He needs to read his brief. I know that I am a deaf nit, but I have to put up with that. Unfortunately, at this stage, I do not have the opportunity to read what the Minister said before the next stage of the Bill.

Lord Bassam of Brighton: My Lords, I apologise to the noble Lord if he had some difficulty in following me. I have a slight cold and it is affecting my delivery. I apologise to the House.

Lord Swinfen: My Lords, there is no need for the Minister to apologise. The worst people are those with thick moustaches and heavy beards—you cannot see their lips and so what they are saying. I am glad to say that the noble Lord, Lord Ahmed, has his moustache and beard neatly trimmed, so that, if he were to take part in the debate, I could see what he is saying, but not everyone is so considerate.
	I still think the provision rather odd and very dubious in many respects because, as would occur under the scheme as it stands, if I needed to be investigated and were to employ the investigator on my terms to investigate me and my behaviour, no one else would take the report with anything other than a pinch of salt. I still feel that, with all due respect to the current holder of the office—who I am certain is perfectly honourable—in future, someone may be incapable of doing the job properly. That is why I want there to be someone who is seen to be totally independent. Having said that, I shall withdraw the amendment. I am sure that someone else will take it up in another place. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Crawley: My Lords, I beg to move that the proceedings after Third Reading be adjourned. In moving this Motion, I suggest that further proceedings after Third Reading begin again not before 8.12 pm.

Moved, accordingly, and on Question, Motion agreed to.

Family Procedure (Modification of Enactments) Order 2005

Lord Evans of Temple Guiting: rose to move, That the draft order laid before the House on 12 October be approved [5th Report from the Joint Committee].

Lord Evans of Temple Guiting: My Lords, in moving that the draft Family Procedure (Modification of Enactments) Order 2005 be approved, I shall speak also to the draft Access to Justice Act 1999 (Destination of Appeals) (Family Proceedings) Order 2005 and the draft Revised Legal Services Commission Funding Code 2005.
	First, the orders and revisions to the code are minor definition changes to facilitate the implementation of the Adoption and Children Act 2002 and the Civil Partnership Act 2004, both of which come into force in December. The orders are the only two affirmative instruments tabled by the Department for Constitutional Affairs relating to the implementation of the Adoption and Children Act 2002. They provide continuity of current provisions as we move from the soon-to-be-repealed Adoption Act 1976 to the Adoption and Children Act 2002. For ease, we have tabled these with the revised funding code, prepared by the Legal Services Commission, which simply adds the Adoption and Children Act 2002 and the Civil Partnerships Act 2004 to the list of legislation covered by the code.
	I turn to the effect of the orders. The Family Procedure (Modification of Enactments) Order 2005 will enable family proceedings courts to continue to issue witness summons, which has previously been provided by Sections 97(1)(a) and (2) of the Magistrates' Courts Act 1980. The Access to Justice Act 1999 (Destination of Appeals) (Family Proceedings) Order 2005 allows appeals in adoption matters to continue to be heard by the courts to which they are currently assigned. Appeals would otherwise lie directly to the Court of Appeal in almost every case, which is neither time nor cost-effective.
	Both those orders are needed to ensure a smooth transition from the old to the new rules. They underpin the adoption policy of the Department for Education and Skills, which has already been approved by Parliament—including by affirmative debate on two instruments moved by my noble friend Lord Adonis on 8 June. All other strands of DCA's court rules have been consulted on and approved by the Family Procedure Rules Committee. In addition, the Lord Chancellor has consulted the Lord Chief Justice, the Master of the Rolls, the President of the Queen's Bench Division, the President of the Family Division and the Chancellor of the High Court on the destination of appeals order. No comments were made on that order.
	On the funding code, the amendments are all minor, non-controversial changes that essentially update the funding code to capture the new proceedings being introduced by the Adoption and Children Act 2002 on 30 December 2005 and the Civil Partnership Act 2004 on 5 December 2005. The legal profession has been informed of the proposals and has not raised any concerns.
	I stand ready with more detail of the sections and orders, should noble Lords require, but I think that your Lordships will understand that these are necessary and technical amendments that make no practical change to legislation, the daily business of practitioners or the general public. I commend the order to the House. I beg to move.
	Moved, That the draft order laid before the House on 12 October be approved [5th Report from the Joint Committee].—(Lord Evans of Temple Guiting.)

Lord Goodhart: My Lords, when I first looked at the Forthcoming Business and saw that these three orders were expected to take 45 minutes to debate, I thought that some serious issues would arise from them. I was therefore a little surprised, having read the draft orders and the helpful accompanying Explanatory Memoranda, that there was nothing to argue about. That now seems to be the case.
	It is plain that these amendments are minor ones consequential mainly on the Adoption and Children Act 2002 and, to a lesser extent, on the Civil Partnership Act 2004. In the circumstances, I am happy to see them go through.

Lord Kingsland: My Lords, I share entirely the view of the noble Lord, Lord Goodhart, that these orders are both uncontroversial and desirable.
	The Family Procedure (Modification of Enactments) Order 2005 serves two purposes. First, it enables a justice of the peace, at the hearing of an application under the Adoption and Children Act 2002, to issue a witness summons. Secondly, it ensures that in such applications a warrant of arrest cannot be issued instead of a witness summons. It is clear that in so doing this order will facilitate the purpose of the Adoption and Children Act 2002; namely, to minimise delay in the court process, thus putting the interests of the child first. These aims were supported by the Opposition and by Liberal Democrat Members during the passage of the Act through both Houses.
	The Access to Justice Act 1999 (Destination of Appeals) (Family Proceedings) Order 2005 is also uncontroversial. It sets out the route of appeal in adoption proceedings, providing for two routes. Appeals against a decision by a district judge in a county court shall lie to a county court judge. Appeals against a decision of a district judge which go to the High Court, the Principal Registry of the Family Division or a costs judge will lie to a judge of the High Court. This order is necessary to preserve the status quo under the RSC 1965 and CCRs, once the Adoption and Children Act 2002 comes into force on 30 December 2005.
	On the amendments to the criteria underlying the Legal Services Commission Funding Code, the first amendment at Section 2.2 includes, in the definition of "family proceedings", references to proceedings under the Adoption and Children Act 2002 and the Civil Partnership Act 2004. The second amendment includes in the definition of "other public law children cases" applications for a placement order. This new order will be available once the 2002 Act comes into force on 30 December. The final amendments are to the introductory paragraphs and simply reflect the fact that it is a revised code that will come into force only when approved by the Lord Chancellor and by Parliament. These amendments are non-controversial and bring the LSC Funding Code up to date with primary legislation that comes into force at the end of the year.

Lord Evans of Temple Guiting: My Lords, I am most grateful to both noble Lords not only for the brevity of their speeches, but also for the fact that they welcome the orders. I commend them to the House.

On Question, Motion agreed to.

Access to Justice Act 1999 (Destination of Appeals) (Family Proceedings) Order 2005

Lord Evans of Temple Guiting: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
	Moved, That the draft order laid before the House on 12 October be approved [5th Report from the Joint Committee].—(Lord Evans of Temple Guiting.)

On Question, Motion agreed to.

Revised Funding Code prepared by the Legal Services Commission

Lord Evans of Temple Guiting: My Lords, I beg to move the third Motion standing in my name on the Order Paper.
	Moved, That the Revised Funding Code laid before the House on 19 October be approved [6th Report from the Joint Committee].—(Lord Evans of Temple Guiting.)

On Question, Motion agreed to.

Baroness Royall of Blaisdon: My Lords, I beg to move that the House do now adjourn during pleasure.

Moved accordingly, and, on Question, Motion agreed to.
	[The Sitting was suspended from 7.52 to 8.12 pm]

Charities Bill [HL]

Proceedings after Third Reading resumed.

Lord Swinfen: moved Amendment No. 7:
	After Clause 26, insert the following new clause—
	"RECEIVER AND MANAGER TO BE PAID BY COMMISSION
	In section 19(6)(b) of the 1993 Act, for "the income of the charities concerned" substitute "the Charity Commission for England and Wales"."

Lord Swinfen: My Lords, the purpose of the amendment is to make the Charity Commission responsible for paying its own receivers and managers and not the charity on which they are imposed. There are cases, such as the Little Gidding Trust case, where the commission initially refused to appoint a receiver and manager when the trustees requested it because it was believed that the charity did not have sufficient liquid funds to pay. The amendment runs counter to the arrangements for commercial companies, but the situation in charities is very different.
	First, funds to be used are not private commercial money of companies whose management has been incompetent. In charities, the funds are donations given by the public for charitable purposes. As I understand it—perhaps the Minister will confirm it—by law those donations must be used for the purposes for which they were given, not for spending on receivers and managers. Secondly, the commission has too often shown itself to be grossly irresponsible with charity funds in appointing receivers and managers.
	I shall give only one example today as I have given several in the past. That is the recently published case of the Kings Ministry Trust, also known as the Kingsway International Christian Church or KICC. This unincorporated trust has for some years been remunerating its trustees for various services and doing so quite openly. It made the mistake of not realising that it should have altered its constitution explicitly to allow that to be done. If something needs the commission's permission, that is routine and not a large hurdle.
	I am told that the commission's inquiry lasted nearly three years and has cost the charity £1.2 million for the receiver and manager and his eight consultants as well as considerable damage to its charitable work. The practical result is that this trust has been turned into a charitable company. Token restitution is to be paid by one of the trustees and some new trustees have been brought on to the board. With some advice from the commission and the use of the charity lawyer, the trustees of this charity could have affected these changes for some £12,000—one-hundredth of the sum the commission has already spent. Even if the trustees had been wildly extravagant, they could not conceivably have spent more than £120,000—one-tenth of the sum squandered by the Charity Commission.
	On 18 October, at col. 688 of Hansard, the Minister, the noble Lord, Lord Bassam, said that the Charity Commission had secured charity assets to the tune of almost £20 million for the seven cases which concluded in 2004–05. However, he did not mention, and probably does not know, that nearly the whole of the seven charities' £20 million was the assets of the KICC, much of which I am told was quite safe in the form of the church's buildings and land in Hackney. The Charity Commission did not therefore secure or protect £20 million of charitable assets—most of it was not under any discernable threat. Or at least it was not until the commission decided to blow £1.2 million of charity funds on some expensive City consultants.
	When we last met, the Minister also told us,
	"Such appointments are made only after careful consideration . . . and generally after a tender exercise".
	He later said:
	"The commission has a statutory responsibility to supervise all receiver and manager appointments, which it discharges in all cases".—[Official Report, 10/10/05; cols. 687-88.]
	Noble Lords may be interested to learn that the commission gave such careful consideration and supervision that under the receiver and manager it appointed to the Little Gidding Trust the quoted price rose from £10,000 to £25,000 by the time the inquiry closed. At the Cancer and Leukaemia in Childhood charity the receiver and manager was appointed for the price of £22,000, which had risen to £65,000 by the end of his investigation. At Iran Aid the contract price was £97,000, but when the receiver and manager left the charity was poorer by £470,000. In the KICC case, the quoted and contracted price was £140,000, which, as we have heard, rose to £1.2 million under the careful supervision of the Charity Commission—nine times the original price.
	The Minister invited the House to agree with the basic principle that it should not fall to public funds to pay for the cost of a receiver and manager. I put it to noble Lords that there is an overriding principle that funds donated for charitable purposes should not be made available to a regulator which has demonstrated time and again its ability to lose control of its own consultants and squander funds held in trust by charities for their beneficiaries.
	The amendment will have the practical effect of encouraging the commission to take considerably more care in its use of consultants than has hitherto been the case. I suggest that it will cause an immediate fall in the sums paid to receivers and managers and that this can only have a beneficial effect for the charities.
	When considering the remuneration of receivers and managers, Section 19(6)(b) of the 1993 Act states that the regulations made by the Secretary of State may make provision with respect to,
	"the remuneration of such persons out of the income of the charities concerned".
	Can the Minister confirm that in the cases I have mentioned—and in all cases—the remuneration of receivers and managers is paid out of the income of charities and not out of their capital assets? I beg to move.

Lord Bassam of Brighton: My Lords, it will be best if I repeat the key points that I made on Report, when the noble Lord moved an identical amendment. I say that because they still represent the Government's view.
	In practice, the appointment of an interim manager is usually a last resort for the commission when it considers that it is essential to secure the assets of a charity where it has found evidence of serious misconduct or mismanagement in the administration of a charity, or where it is clear that assets are at risk. A formal inquiry into the charity must also be under way under Section 8 of the Charities Act 1993.
	Before taking the serious step of appointing an interim manager the commission will have considered all other options. In the majority of cases appointments are made after a tender exercise to get the right person for the job at value for money. We still believe that in these circumstances it is usually appropriate that the charity pays for the cost of the interim manager. Charities must be responsible for their own affairs and responsible for the consequences of their decisions and actions. This includes the consequences of mismanagement. In most cases public funds should not be used to pay the costs of an interim manager appointed to a charity because of the actions of the trustees.
	I also mentioned on the previous occasion that the cost of the appointment of an interim manager should be weighed up against the benefits to charities. In the seven cases which concluded in 2004–05, as the noble Lord, Lord Swinfen, acknowledged, £20 million-worth of charity assets were secured.
	The commission has the power, where appropriate, to meet the fees and expenses of an interim manager from public funds. In its recent letter to Peers who spoke on Report, the commission gave details of two occasions during the past two years when this happened. The first was in the case of Lincoln Council for Voluntary Service, where a receiver and manager was appointed from July 2003 until November of that year. The cost was £3,500 plus VAT. The second case is a case in progress. The commission's letter states that this is where,
	"a receiver and manager was appointed on a contingency basis on 13 December 2003. As the charity had no cash assets at that time an indemnity was offered but the costs were eventually met by the charity. Because this case is still in progress the name of the charity has not been made public".
	However, we would expect the use of public funds to be in exceptional cases.
	The commission has a statutory responsibility to supervise all receiver and manager appointments, which it discharges in all cases. In some cases, the costs of professional advice incurred by the interim manager would be incurred by the trustees were the interim manager not in place. The commission is very aware of the sensitivities involved in appointing an interim manager, and particularly of the resultant costs to the charity. It has recently started publishing the costs of interim managers.
	In July this year it published the costs of receiver cases concluded in 2004–05, and the details are still available on its website. The commission, when publishing the details, said:
	"Details of individual appointments are provided in the Inquiry Report which is published after the conclusion of each Inquiry. These reports are available on the Commission's website. However to further increase transparency the Commission has decided that at least once each year it will publish together certain details of all R & M appointments closed in the financial year and the number of such appointments remaining in operation".
	I will also add that the new powers to give directions to be conferred on the commission under Clauses 20 and 21 may lead to a reduction in such appointments as they will provide an alternative and simpler route to dealing with some of the concerns that currently give rise to appointments.
	The noble Lord, Lord Swinfen, referred to the Kingsway International Christian Centres appointment and receiver managers. A recently published report of an interim manager appointment related to the Kings Ministries, where the actions of the interim managers appointed by the commission secured charitable funds of more than £19 million. KICC took over the running and management of it on 23 March, having been appointed sole corporate trustee of the Kings Ministries. The Kings Ministries' financial performance during the period of the appointment was very impressive. The charity's income grew to more than £8.5 million in its financial year ending March 2004, and the interim managers made gift aid claims to the value of £3.3 million for the financial years 2000–2004. The commission believes, understandably, that the future success of this charity is assured by the charity having new trustees, a new senior management team, an extremely strong financial performance and a new incorporated structure. That demonstrates the benefits of such appointments.
	The noble Lord, Lord Swinfen, asked whether the receiver's remuneration always comes out of a charity's income rather than its capital. As far as I can be certain, that is the case.
	We have covered the issue several times, and I think that we have the legislation and the framework right. The type of intervention that I have described is a good example of what can be achieved through the right sort of appointment when a charity in the past has perhaps operated below par or inappropriately. I trust that the noble Lord will withdraw his amendment.

Lord Swinfen: My Lords, the noble Lord said that I had agreed with him that some £20 million had been secured, and he said that some £19 million had been secured with the KICC charity. But the noble Lord does not seem to have taken on board that the vast majority of that amount were the assets of the charity in the form of property, which was not in any danger. I understand that the problem was that the person running the charity had paid himself some £200,000 and that arrangements were being made for him to repay that in any case. The amount spent on the whole exercise was exhorbitant.
	I am glad that the Minister said that the receivers and managers were paid out of income, as laid down by the Charities Act 1993, as I said. Most of the income of charities is in the form of donations. Am I not right in thinking that charities have to use donations for the purpose for which they are given? The noble Lord, Lord Phillips of Sudbury, is shaking his head, so I may be wrong.

Lord Phillips of Sudbury: My Lords, I was shaking my head because the noble Lord has put it over-simply. In the normal course of events if a gift is made subject to a condition as to the use of that gift, the charity can use it only according to that condition. Most gifts are not of that nature, and are therefore usable for any purpose. If a charity finds itself in the position of having no other assets out of which to meet its obligations other than assets donated to it subject to condition or trust, in those circumstances it will have to have recourse to those earmarked gifts to discharge its obligations. I offer that to help.

Lord Swinfen: My Lords, I am grateful because that clarifies the position. I was always under the impression that if one set out an appeal to, say, restore the bells in a church, funds had to be used for that purpose, and not to restore the roof. I am glad that the noble Lord has put me right. I always learn things in this House.

Lord Phillips of Sudbury: My Lords, the noble Lord has just given a formulation which, regrettably, is not so. If there is an appeal to raise money for bells, the money raised in the course of the appeal must be applied to the bells, save in circumstances where the charity has obligations which it cannot meet out of its general assets and has to have recourse to its earmarked assets such as a fund for the bells. In those circumstances the funds would not go towards the bells but to meet the obligations. I am getting into deep water—I should sit down and shut up.

Lord Swinfen: My Lords, I thank the noble Lord very much. I think that I should sit down and shut up, too.
	I do not intend to take this matter any further tonight. I just wanted to make certain that the House was aware that, in my view, the Charity Commission does not always run its receivers and managers as well as it should. It ought to have a good hard look at how they operate. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 40 [Power to transfer all property]:

Lord Bassam of Brighton: moved Amendment No. 8:
	Page 40, line 19, after "purposes" insert "(or any of the purposes)"

Lord Bassam of Brighton: My Lords, I should like to put on record my gratitude to the noble Lord, Lord Hodgson, for diligently raising some issues to do with Clause 40, which gives the power to some charities to transfer all property. Amendments Nos. 80 and 81, which he tabled at Report and Amendments Nos. 59 and 60, which he tabled in Committee, were neat and succinct, and I feel minded to apologise for the length of the amendments we have tabled in response. However, they have to be drafted in that way to give full effect to what we are attempting to achieve.
	For the benefit of any noble Lords who were not present during our earlier debates, Clause 40 gives an unincorporated charity with a gross income of £10,000 or less the power to transfer all its property to one or more charities. This group of amendments falls into two sets, because we have identified a need to have different regimes for permanent endowment on the one hand and both expendable endowment and accumulated income on the other.
	The first set of amendments in the group comprise Amendments Nos. 8, 9 and 10. They set out the regime for property other than permanent endowment—in other words, expendable endowment and accumulated income. The noble Lord's concerns were that where the transferor charity had purposes A and B, the current provisions of the Bill require that if there is more than one transferee charity, both should also have purposes A and B. Amendments Nos. 11, 12 and 13, which form the second set of amendments in the group, set up a regime for a transfer where a charity has permanent endowment.
	I could go into greater detail, but I see the noble Lord giving me the nod that I no longer need to do so. I think he understands fully the purport and intention of the amendments. With that, I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, I thank the noble Lord for having taken this point on board. We have chased through, and I am very grateful; I think this will help smaller charities get together.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendments Nos. 9 to 12:
	Page 40, line 20, leave out "wide enough to encompass the purposes" and insert "substantially similar to the purposes (or any of the purposes)"
	Page 41, line 14, leave out "purposes which are similar in character" and insert "such of its purposes as are substantially similar"
	Page 41, line 37, at end insert—
	"( ) Where a charity has a permanent endowment, this section has effect in accordance with section 74AA."
	Page 42, line 26, at end insert—
	"74AA TRANSFER WHERE CHARITY HAS PERMANENT ENDOWMENT
	(1) This section provides for the operation of section 74 above where a charity within section 74(1) has a permanent endowment (whether or not the charity's trusts contain provision for the termination of the charity).
	(2) In such a case section 74 applies as follows—
	(a) if the charity has both a permanent endowment and other property ("unrestricted property")—
	(i) a resolution under section 74(2) must relate to both its permanent endowment and its unrestricted property, and
	(ii) that section applies in relation to its unrestricted property in accordance with subsection (3) below and in relation to its permanent endowment in accordance with subsections (4) to (11) below;
	(b) if all of the property of the charity is comprised in its permanent endowment, that section applies in relation to its permanent endowment in accordance with subsections (4) to (11) below.
	(3) Section 74 applies in relation to unrestricted property of the charity as if references in that section to all or any of the property of the charity were references to all or any of its unrestricted property.
	(4) Section 74 applies in relation to the permanent endowment of the charity with the following modifications.
	(5) References in that section to all or any of the property of the charity are references to all or any of the property comprised in its permanent endowment.
	(6) If the property comprised in its permanent endowment is to be transferred to a single charity, the charity trustees must (instead of being satisfied as mentioned in section 74(4)(b)) be satisfied that the proposed transferee charity has purposes which are substantially similar to all of the purposes of the transferor charity.
	(7) If the property comprised in its permanent endowment is to be transferred to two or more charities, the charity trustees must (instead of being satisfied as mentioned in section 74(4)(b)) be satisfied—
	(a) that the proposed transferee charities, taken together, have purposes which are substantially similar to all of the purposes of the transferor charity, and
	(b) that each of the proposed transferee charities has purposes which are substantially similar to one or more of the purposes of the transferor charity.
	(8) In the case of a transfer to which subsection (7) above applies, the resolution under section 74(2) must provide for the property comprised in the permanent endowment of the charity to be divided between the transferee charities in such a way as to take account of such guidance as may be given by the Commission for the purposes of this section.
	(9) The requirement in section 74(11) shall apply in the case of every such transfer, and in complying with that requirement the charity trustees of a transferee charity must secure that the application of property transferred to the charity takes account of any such guidance.
	(10) Any guidance given by the Commission for the purposes of this section may take such form and be given in such manner as the Commission considers appropriate.
	(11) For the purposes of sections 74 and 74A above, any reference to any obligation imposed on the charity trustees by or under section 74 includes a reference to any obligation imposed on them by virtue of any of subsections (6) to (8) above.
	(12) Section 74(14) applies for the purposes of this section as it applies for the purposes of section 74."
	On Question, amendments agreed to.
	Clause 41 [Power to replace purposes]:

Lord Bassam of Brighton: moved Amendment No. 13:
	Page 42, line 28, leave out "74A" and insert "74AA"
	On Question, amendment agreed to.
	Clause 43 [Power to spend capital]:

Lord Hodgson of Astley Abbotts: moved Amendment No. 14:
	Page 45, leave out lines 17 to 19.

Lord Hodgson of Astley Abbotts: My Lords, I have to detain the House for a moment or two on this amendment. It deals with an issue I raised at Report stage but, having heard the arguments then put forward by both the Minister and the noble Lord, Lord Phillips—the noble Lord has an amendment in this group, which aims down the same alleyway as mine—I have returned to it on a narrowed basis. The amendment is concerned with Clause 43 and the power to spend capital. Clause 43 is the replacement for Section 75 of the Charities Act 1993.
	Perhaps I may briefly summarise the background again. I remain concerned by the unsatisfactory and unclear position of what is known as "permanent endowment". Permanent endowment is defined in Section 96(3) of the Charities Act 1993 as follows:
	"A charity shall be deemed for the purposes of this Act to have a permanent endowment unless all property held for the purposes of the charity may be expended for those purposes without distinction between capital and income, and in this Act, 'permanent endowment' means, in relation to any charity, property held subject to a restriction on its being expended for the purposes of the charity".
	The result of this definition is that unless a donor specified that a gift was not to be regarded as permanently endowed, it would be so regarded. Gifts that may have been made centuries ago are therefore trussed up in a way that is probably quite at odds with the wishes of the now long dead original donor.
	My amendment on Report sought to reverse this position by taking into permanent endowment only those gifts so specifically designated by the donor. The present position is that charities can be inhibited in maintaining their assets in their most effective form; for example, selling a small piece of land with planning permission and using the proceeds to enhance and improve the charity's other buildings will require the Charity Commission's consent. This may be given only the basis of a scheme of "recoupment", which requires the replacing of the fixed asset over a period of years.
	To my commercial, but non-legal, eye—I am aware that the noble Lord, Lord Phillips, dislikes fudges—recoupment seems to be a classic fudge. Recoupment is normally carried out on a straight, pound for pound basis. This means that neither interest nor inflation is taken into account. So if recoupment is really meant to protect the alleged wishes of the original donor, it fails to do so. So why should we not be open and clear about it? Let us accept that proving a negative is extremely difficult and allow that, unless the donor expressly wished it, permanent endowment will not apply.
	On Report, I tabled two amendments, the second of which was a redefinition of Clause 96(3) of the 1993 Act. On reflection, having re-read the debate of 18 October, I think that I was being overambitious. Amendment No. 14 is therefore a narrower amendment which would permit "land" to be included in "available endowment fund". That would be achieved by leaving out lines 17 to 19 of page 45 of the Bill.
	I have heard it suggested that this amendment is unnecessary because when the land is sold it becomes cash and so no longer falls within the prohibition, but instead qualifies as "available endowment fund" under Clause 43(7)(a) and (b). If this is indeed the case, the whole clause must be without purpose. It must indeed be a farce.
	In our earlier debate, the noble Lord, Lord Phillips, asked me three questions to which I owe him a formal reply. First, do I seek to apply this principle to charity law generally? Yes, I do. Secondly, he asked me to define and explain the issue of "intention". This is no longer relevant because I am not seeking to redefine "permanent endowment" any longer. Thirdly, he asked about the application of the new approach. Again, some of its force has been reduced by the narrower objective of the amendment, but I of course seek to reach back to solve the problem of donations made many years ago where no specific wish was expressed by the donor. Indeed, the noble Lord, Lord Phillips, and his colleagues in charity law are now well aware of this problem and so always ensure that present donors' views are made clear when the gift is made.
	I conclude. It is generally accepted that the definition of "permanent endowment" in the 1993 Act is unduly restrictive, clumsy and unhelpful to charities. My amendment seeks to achieve clarity and to free charities from dependence on the inevitably capricious judgments that are made from time to time by the Charity Commission.
	I do not wish to divide the House on my amendment unless I have to. I hope that the Minister will be able to reassure me by making a commitment to look further at this issue during the passage of the Bill in another place. At the very least, the Minister needs to put on record his expectation that the Charity Commission will act expeditiously and flexibly in this important area. I beg to move.

Lord Phillips of Sudbury: My Lords, although my Amendment No. 15 is grouped with Amendment 14, it might be clearer to the House if the Minister were to reply to the amendment moved by the noble Lord, Lord Hodgson. If the Minister prefers that the pair be dealt with together, I will be content; but I wonder whether it will not be confusing things to have two different amendments—which are complex enough—being responded to on a single occasion. What does the Minister think?

Lord Bassam of Brighton: My Lords, the Minister thinks it would be wise to deal with them both together, so that we can move business rather faster.

Lord Phillips of Sudbury: My Lords, that is irresistible reasoning. My amendment is directed at a situation where a charity has endowed property in the form of land—sometimes called in specie land—which is surplus to its requirements; or at least where the land could better be used by its being sold and invested in other land; or, more likely, sold and invested in buildings on the land.
	The amendment in my name would, subject to its provisions, allow the trustees of the charity, without recourse to the Charity Commission, to go ahead with the sale—and to use the proceeds on a building which had an expected life of not less than 75 years, or on other land used for the purposes of the charity. Secondly, it would allow that to be done without the need for recoupment. The noble Lord, Lord Hodgson, put it well; there is a burden of recoupment, especially as it normally has to come out of the charity's income. Imagine a charity realising £1 million on the sale of some land which it was going to use for a building for its own purposes; there might then be a recoupment order which would so reduce the net income of the charity, year to year, as to make the whole venture impractical.
	Amendment No. 15 therefore says that, if its conditions are to be complied with, then, first, the excluded endowment, as it is called,
	"is surplus to . . . current and foreseeable needs";
	secondly, that,
	"the trustees are satisfied that the purposes of the charity could be carried out more effectively",
	if that excluded land were to be sold and the proceeds used for purchasing other land and erecting new buildings; thirdly and importantly, if it be the latter—that is to say, the funds are to be used for the building of premises—a qualified architect must certify that the expected life of the new buildings is,
	"not less than 75 years".
	Then, to bolt and bar the arrangement, because it is quite a radical departure from the current one, the Charity Commission, in looking at the resolution of the trustees importing the provisions of this amendment, would have to be satisfied,
	"as to the wishes of the donor",
	and take those into account. It should also take into account,
	"changes in the circumstances relating to the charity",
	since the making of the land that is being sold. Thirdly, it would have to have regard to,
	"the spirit of the gift or gifts".
	Provided it was satisfied on those three counts, there would be a more or less automatic endorsement of the resolution of the trustees to get on with the sale for the purposes mentioned.
	I hope that the noble Lord, Lord Hodgson, will identify himself with my remarks. It seems to me to be an exception to the hitherto iron rule protecting endowment in the form of land. It is practical and it will speed the better use by charities of surplus land. It should therefore be encouraged by the Government. I hope that the amendment will commend itself to the Minister.

Lord Bassam of Brighton: My Lords, the effect of Amendment No. 14 would be that permanent endowment land held on trust to be used for the purposes of the charity would fall within the scope of the new power set out in Clause 43 to permit unincorporated charities to spend capital in certain circumstances. That, if I understand rightly, is the purpose of the amendment moved by the noble Lord, Lord Hodgson. It would facilitate the use of capital proceeds of sale of such land without the need for it to be recouped out of the future income of the charity. I believe that that is also the intention behind the amendment tabled by the noble Lord, Lord Phillips. He seeks, in the circumstances set out in his amendment, to permit the expenditure of proceeds of the sale of land in some cases. This would be when the land was held on trust, when it is stipulated that it is to be used for the purposes of the charity, and when the land is surplus to current foreseeable needs, when the purposes of the charity could be more effectively carried out and the proceeds used to purchase land or erect buildings which are to be used for the purposes of charity, and when the buildings are to be erected by a qualified architect who has certified that the proposed buildings have an expected life of not less than 75 years.
	We do not believe it right to override that stipulation, when trusts on land which is held specifically set out that land is to be used for the purposes of the charity. That remains our position. Having said that, in recognition of some of the concerns that have been expressed, the commission has told me that it will carry out a fundamental review of its interpretation of the law on practice when it exercises its discretion whether to require recoupment. That review will also cover the principles governing the circumstances of recoupment in any particular case. In particular, the commission assures me that it will consider whether an apportionment of the value of sales proceeds between the value of the land and the value of the buildings, the latter only requiring recoupment, may be appropriate. It will also consider whether in the provision of substantial buildings lasting, say, over 75 years, and when the proceeds may be surplus to the charity's reasonable requirements, any recoupment may be necessary at all.
	There may be other factors as well, but the commission has assured me that it will carry out a review, which it hopes to complete in the next few months. I believe that these matters are best dealt with by the commission on a case-by-case basis, given the different circumstances that apply to each charity that may be affected. It is not best dealt with by statutory intervention—and I think that the noble Lord, Lord Hodgson probably agrees with that from the hint that he gave in his earlier comments on what he expected out of our discussion of these amendments.
	I reassure the House that the commission has recognised the issue and will review it. I hope that, having heard that, the noble Lords will feel able to withdraw, or not move, their valuable amendments—valuable because they focus on a genuine issue—and that we can proceed in that way, as it would be a more constructive approach.

Lord Hodgson of Astley Abbotts: My Lords, I am grateful to the Minister, who remains courteous as ever at the end of a very long session on this Bill. The only thing that I disagreed with was his assumption that the amendments were intended to break permanent endowment. We are saying that when it is not made clear by the original donor it will be assumed that he or she did not want permanent endowment, as opposed to the other way round. We are not trying to undermine the position, and I do not believe that the noble Lord, Lord Phillips, is trying to do that either. All we are saying is, "Back then, they didn't know what they were saying, so can we give some flexibility so that the charity can go forward?" That is what I believe is important—that we ensure that the Charity Commission does not truss up these charities because someone in 1800 did not say, "I am prepared to allow this to be used widely for the general benefit of the charity that I am trying to establish". That was all that we were trying to get at.
	The Minister has gone a good way—two-thirds of the way; it is two rather than three cheers for the Minister on this one. In the light of what the Minister has said, I hope that we can pick this up and have another go at it in the other place. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Phillips of Sudbury: had given notice of his intention to move Amendment No. 15:
	Page 47, line 19, at end insert—
	"( ) This section is without prejudice to section 75ZB.
	75ZB POWER TO SPEND CAPITAL WHICH CONSISTS OF EXCLUDED ENDOWMENT
	(1) This section applies to any excluded endowment of a charity which cannot be spent under the provisions of section 75A and "excluded endowment" means land held on trusts which stipulate that it is to be used for the purposes, or any particular purposes, of the charity.
	(2) Where the conditions in subsection (3) below are met, the charity trustees may resolve for the purposes of this section that the excluded endowment, or part of it, ought to be sold and be freed from—
	(a) the restrictions with respect to expenditure of capital; and
	(b) any restrictions with respect to the use to which the land must be put;
	that apply to it so that the proceeds of sale may be used to purchase land or erect buildings (or both) to be used to further the purposes, or any particular purpose, of the charity.
	(3) The conditions referred to in subsection (2) are that—
	(a) the charity trustees are satisfied that the excluded endowment (or part thereof) which they propose to sell is surplus to the current and forseeable needs of the charity;
	(b) the charity trustees are satisfied that the purposes of the charity could be carried out more effectively if the excluded endowment, or the relevant portion thereof, were sold and the proceeds applied in purchasing land or erecting buildings (or both) to be used for the purposes, or any particular purpose, of the charity; and
	(c) that, where the charity trustees propose using the proceeds of sale of the expendable endowment (or part thereof) to erect a building, the charity trustees have obtained a certificate from a qualified architect that the proposed building has an expected life of not less than 75 years.
	(4) The charity trustees—
	(a) must send a copy of any resolution under subsection (2) to the Commission, together with a statement of their reasons for passing it and a certified copy of the statement referred to in subsection (3)(c) above; and (b) may not implement the resolution except in accordance with the following provisions of this section.
	(5) Subsections (6) and (7) of section 75A apply to this section.
	(6) When considering whether to concur with the resolution, the Commission must take into account—
	(a) any evidence available to it as to the wishes of the donor or donors mentioned in section 75A(1)(a),
	(b) any changes in the circumstances relating to the charity since the making of the gift or gifts (including, in particular, the needs of its beneficiaries, and the social, economic and legal environment in which it operates),
	(c) the spirit of the gift or gifts mentioned in section 75A(1)(a) (even though a sale would be inconsistent with the restrictions imposed upon the gift or gifts).
	(7) Before the end of the period of three months beginning with the relevant date, the Commission must notify the charity trustees in writing either—
	(a) that the Commission concurs with the resolution, or
	(b) that it does not concur with it.
	(8) In subsection (7) above, "the relevant date" means—
	(a) in a case where the Commission directs the charity trustees under subsection 75A(6) (as applied to this section) to give public notice of the resolution, the date when that notice is given, and
	(b) in any other case, the date on which the Commission receives the copy of the resolution in accordance with subsection (4) above.
	(9) Where—
	(a) the charity trustees are notified by the Commission that it concurs with the resolution, or
	(b) the period of three months mentioned in subsection (7) above has elapsed without the Commission notifying them that it does not concur with the resolution,
	the excluded endowment (or portion) may, by virtue of this section, be sold and expended in carrying out the purposes, or any particular purpose, set out in the resolution mentioned in subsection (2).
	(10) In this section—
	(a) "qualified architect" means an individual registered with the Architects Registration Board; and
	(b) references to the erection of buildings includes any expenditure reasonably necessary to equip such buildings for the purposes of the charity."

Lord Phillips of Sudbury: My Lords, I would like to respond briefly to the Minister. I am grateful for the movement that his reply represented. I would be grateful if he would respond to this, however briefly. He said that the Charity Commission was undertaking a review of all this, and that it thought there might be a possibility of changing its own policy with regard to permanent endowment, which would be along the lines of the amendment. My concern is that if it comes to the conclusion that it does not have that flexibility or that power, unless it acts speedily we will have lost the chance to put the law right in the other place. It seemed to me that the Minister endorsed the overall objective of both my amendment and that of the noble Lord, Lord Hodgson. I wonder, therefore, whether he can give us any reassurance that if the inquiries prove to be negative we can have a joint essay down the other end to make the Bill that much better.

Lord Bassam of Brighton: My Lords, I would like to be able to say, "Yes, of course we can do that", but the noble Lord is asking for something I cannot deliver, and I think he knows that. I said that this is best dealt with not in the legislative straitjacket that can sometimes be created but by way of an internal commission review. I am sure the noble Lords, Lord Phillips and Lord Hodgson, will want to make some representations to the commission on what they both consider to be important issues. My understanding is that the commission will be flexible in the way it responds. It understands the point the noble Lord, Lord Hodgson, made about charities being "trussed up". We have gone a long way on this, but I cannot give that assurance. It would be quite wrong of me to do so, and I think the noble Lord understands that.
	Amendment No. 15 not moved.

Clause 44 [Merger of charities]:

Lord Bassam of Brighton: moved Amendment No. 16:
	Page 48, line 31, leave out "and (7)" and insert "to (7A)"

Lord Bassam of Brighton: My Lords, in moving Amendment No. 16, I shall also speak to Amendments Nos. 24 to 32, which are grouped with it. These amendments fulfil the undertaking I think I gave the noble Lord, Lord Phillips, on Report on 18 October, to consider in consultation with him a number of concerns he had about the operation of the merger provisions in Clause 44. The noble Lord pointed out that the Bill, as drafted, contained measures that meant a merger in which a vesting declaration is used does not need to be notified to the commission. He argued that the vesting declaration was a novel and powerful piece of legal machinery, the use of which ought to be notified so that it would be registered by the commission.
	We accept the argument, so one effect of these amendments, in particular Amendment No. 24, is to require notification to the commission of any merger in which a vesting declaration is used. That notification will then trigger registration of the merger by the commission.
	I could go into more detail related to the amendments, but I am not sure it is entirely necessary. I am sure both noble Lords will understand where we are trying to go with this. It reflects our earlier discussions and debates. I beg to move.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 17:
	Page 48, line 33, leave out "whereby" and insert "in connection with which"

Lord Bassam of Brighton: My Lords, in moving Amendment No. 17, I shall also speak to Amendments Nos. 18 to 23, which are grouped with it. Clause 44 is designed to make certain types of merger between charities easier. It does so with two legal devices: one is the vesting declaration, to make the transfer of property from a transferor charity to a transferee charity easier, and the other is a device to ensure that gifts to a transferor charity that take effect on or after the date of registration of the merger belong automatically to the transferee charity, unless they are excluded gifts.
	The Bill provides for the Charity Commission to keep a register of mergers. It allows for any relevant charity mergers to be notified to the commission and requires the commission to enter in the register every relevant charity merger that is notified to it. A relevant charity is defined in subsection (4) of new Section 75C which is inserted through Clause 44.
	The noble Lord, Lord Phillips, identified at an earlier stage what he considered to be shortcomings in the relevant charity merger definition. It is these shortcomings that this group of amendments seeks to address. The effect of the amendments is to make it clearer than the existing words do that a relevant charity merger includes a merger in which the transferring charities have already gone out of existence on the transfer of their property to the merged charity and the merger in which the transferring charities are in future to go out of existence. In other words it clarifies that a merger in which a transferring charity or charities have transferred all their property and are intending to go out of existence but have not yet done so counts as a relevant charity merger and thus can be notified to and registered by the commission. I beg to move.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendments Nos. 18 to 23:
	Page 48, line 35, after "exist" insert ", or is to cease to exist,"
	Page 48, line 37, leave out "whereby" and insert "in connection with which"
	Page 48, line 38, after "exist" insert ", or are to cease to exist,"
	Page 48, line 41, leave out "that" and insert "which"
	Page 48, line 42, after "property")" insert "and whose trusts do not contain provision for the termination of the charity"
	Page 49, line 3, leave out "the" and insert "any"
	On Question, amendments agreed to.

Lord Bassam of Brighton: moved Amendments Nos. 24 to 32:
	Page 49, line 9, at end insert—
	"(6A) If a vesting declaration is made in connection with a relevant charity merger, a notification under subsection (3) above must be given in respect of the merger once the transfer, or the last of the transfers, mentioned in subsection (6) above has taken place."
	Page 49, line 10, leave out "Such a notification" and insert "A notification under subsection (3) is to be given by the charity trustees of the transferee and"
	Page 49, line 11, leave out "so involved" and insert "of property involved in the merger"
	Page 49, line 12, leave out "and"
	Page 49, line 15, at end insert "; and
	"(c) in the case of a notification required by subsection (6A), set out the matters mentioned in subsection (7A).
	(7A) The matters are—
	(a) the fact that the vesting declaration in question has been made;
	(b) the date when the declaration was made; and
	(c) the date on which the vesting of title under the declaration took place by virtue of section 75D(2) below." .
	Page 49, leave out lines 16 to 25 .
	Page 49, leave out lines 26 and 27 and insert—
	"( ) In this section and section 75CA—
	(a) any reference to a transfer of property includes a transfer effected by a vesting declaration; and
	(b) "vesting declaration" means a declaration to which section 75D(2) below applies."
	Page 49, line 30, at end insert—
	"75CA REGISTER OF CHARITY MERGERS: SUPPLEMENTARY
	(1) Subsection (2) applies to the entry to be made in the register in respect of a relevant charity merger, as required by section 75C(3) above.
	(2) The entry must—
	(a) specify the date when the transfer or transfers of property involved in the merger took place,
	(b) if a vesting declaration was made in connection with the merger, set out the matters mentioned in section 75C(7A) above, and
	(c) contain such other particulars of the merger as the Commission thinks fit.
	(3) The register shall be open to public inspection at all reasonable times.
	(4) Where any information contained in the register is not in documentary form, subsection (3) above shall be construed as requiring the information to be available for public inspection in legible form at all reasonable times.
	(5) In this section—
	"the register" means the register of charity mergers;
	"relevant charity merger" has the same meaning as in section 75C."
	Page 49, line 35, leave out "contemplation of" and insert "connection with"
	On Question, amendments agreed to.
	Clause 75 [Pre-consolidation amendments]:

Lord Bassam of Brighton: moved Amendment No. 33:
	Page 77, line 24, after first "or" insert "other"

Lord Bassam of Brighton: My Lords, this is a minor drafting amendment suggested to us by parliamentary counsel. It is a technical matter. I beg to move.

On Question, amendment agreed to.
	Clause 76 [Interpretation]:

Lord Bassam of Brighton: had given notice of his intention to move Amendment No. 34:
	Page 78, line 3, leave out "the context of section 6(5) or 74(5)" and insert "sections 6(5), 74(5) and 75"

Lord Bassam of Brighton: My Lords, my speaking note simply says, "Do not move this amendment". So I shall not do so.

[Amendment No. 34 not moved.]
	Clause 78 [Short title and extent]:

Lord Bassam of Brighton: moved Amendment No. 35:
	Page 78, line 32, leave out "or repeal" and insert ", repeal or revocation"

Lord Bassam of Brighton: My Lords, Schedule 9 sets out some repeals and revocations that we are making. One repeals an Act but revokes secondary legislation. Amendment No. 35 is a minor drafting amendment to Clause 78 suggested by parliamentary counsel. Clause 78 currently states that:
	"Any amendment or repeal made by this Act has the same extent as the enactment to which it relates."
	Since Schedule 9 includes both repeals and revocations, not just repeals, we need to amend Clause 78 to refer to both repeals and revocations.
	Amendment No. 59 has also been suggested by counsel. Counsel has identified the need to amend the Intervention Board for Agricultural Produce (Abolition) Regulations 2001 as a consequential amendment to our earlier Amendment No. 107 to the Deregulation and Contracting Out Act 1994, which we debated on Report. That amendment was to enable certain functions of the Charity Commission to be contracted out where a Minister makes an order so providing. I beg to move this minor amendment.

On Question, amendment agreed to.
	Schedule 4 [Appeals and applications to Charity Appeal Tribunal]:

Lord Bassam of Brighton: moved Amendment No. 36:
	Page 102, line 32, after "2005," insert—
	"( ) any other enactment specified in regulations made by the Secretary of State,"

Lord Bassam of Brighton: My Lords, this amendment is about the new schedule to the Bill—Schedule 1D. It allows the Charity Commission to refer matters to the Charity Appeal Tribunal which have arisen in connection with the exercise by the commission of any of its functions and involve the operation of charity law or the application of charity law to a particular state of affairs. The Attorney-General may refer to the tribunal matters which involve the operation of charity law or the application of charity law to a particular state of affairs.
	There is a definition in the Bill of what "charity law" means in this context. It is any enactment contained in or made under the Act which this Bill will become, the Charities Act 1993 or any rule of law which relates to charities. The amendment allows the Secretary of State to specify additional enactments which come within the meaning of "charity law" for the purposes of references to the tribunal. We think that it is possible that it might become desirable for the tribunal to consider matters of charity law contained in enactments other than those contained in or made under the Act that this Bill will become and the 1993 Act. This power gives sufficient flexibility to enable the tribunal to grow and develop according to need and avoids the necessity of having a comprehensive list of enactments set out in the Bill. I beg to move.

On Question, amendment agreed to.
	Schedule 6 [Group Accounts]:

Lord Bassam of Brighton: moved Amendment No. 37:
	Page 105, line 20, at end insert—
	:TITLE3:"Accounting records
	1A (1) The charity trustees—
	(a) of a parent charity, or
	(b) of any charity which is a subsidiary undertaking,
	must ensure that the accounting records kept in respect of the charity under section 41(1) of this Act not only comply with the requirements of that provision but also are such as to enable the charity trustees of the parent charity to ensure that, where any group accounts are prepared by them under paragraph 2(2), those accounts comply with the relevant requirements.
	(2) If a parent charity has a subsidiary undertaking in relation to which the requirements of section 41(1) of this Act do not apply, the charity trustees of the parent charity must take reasonable steps to secure that the undertaking keeps such accounting records as to enable the trustees to ensure that, where any group accounts are prepared by them under paragraph 2(2), those accounts comply with the relevant requirements.
	(3) In this paragraph "the relevant requirements" means the requirements of regulations under paragraph 2."

Lord Bassam of Brighton: My Lords, this group of amendments introduces some refinements to the Bill's existing provisions on group accounts. The amendments achieve three things. First, they will ensure that, where group accounts are required to be prepared, the accounting records of the charities involved are sufficient to allow the group accounting requirements to be met.
	Secondly, they will give the Home Secretary power to make regulations setting the income and asset thresholds above which the accounts of a charity group must be professionally audited. At present, the Bill prescribes specific income and asset thresholds—respectively at £500,000 and £2.8 million. Some concerns have been expressed about the relationship between the audit thresholds for group accounts and for single-entity accounts. The approach that this amendment adopts will allow us to give more thought to that relationship and to consult more widely on it. The noble Lord, Lord Hodgson, may have raised that point earlier.
	Thirdly, these amendments will ensure that, where a parent charity is required to have its own accounts audited and is required to prepare group accounts, the accounts of the group must also be audited. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, I wish to ask the Minister a question about Amendment No. 38. It removes paragraphs (a) and (b), at the bottom of page 106 and the top of page 107, which set the aggregate gross income at £500,000 and tie that to an accounts threshold or an asset trigger of £2.8 million. As he mentioned, I have distaste for such multiple triggers, but they are at least on the face of the Bill. I am not clear from what he said whether the accounts threshold will disappear and we will have only a gross income figure and an asset figure, or whether the Government are just thinking about whether the threshold will disappear. If it is to disappear, I shall give three cheers, because that is one more threshold out of the way. If not, how will it make its reappearance? If I remember correctly from Committee, the accounts threshold is a Companies Act figure—nothing to do with charities regulation itself. A word of clarification would be helpful.

Lord Bassam of Brighton: My Lords, I think that the noble Lord is correct on the last point—that is my recollection, too. Regarding his general question, we are at the thinking stage. To provide further clarity, I had better send the noble Lord a note about exactly what that means but, given his earlier comments, I think that he would welcome the amendment.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendments Nos. 38 to 42:
	Page 106, line 41, leave out from beginning to end of line 6 on page 107 and insert—
	"(a) the aggregate gross income of the group in that year exceeds the relevant income threshold, or
	(b) the aggregate gross income of the group in that year exceeds the relevant income threshold and at the end of the year the aggregate value of the assets of the group (before deduction of liabilities) exceeds the relevant assets threshold.
	(1A) In sub-paragraph (1)—
	(a) the reference in paragraph (a) or (b) to the relevant income threshold is a reference to the sum prescribed as the relevant income threshold for the purposes of that paragraph, and
	(b) the reference in paragraph (b) to the relevant assets threshold is a reference to the sum prescribed as the relevant assets threshold for the purposes of that paragraph.
	"Prescribed" means prescribed by regulations made by the Secretary of State."
	Page 107, line 6, at end insert—
	"(1B) This paragraph also applies where group accounts are prepared for a financial year of a parent charity under paragraph 2(2) and the appropriate audit provision applies in relation to the parent charity's own accounts for that year."
	Page 107, line 8, after "charity" insert "by virtue of sub-paragraph (1) or (1B)"
	Page 107, line 32, after "charity" insert "by virtue of sub-paragraph (1)"
	Page 107, line 35, at beginning insert "In this paragraph"
	On Question, amendments agreed to.

Lord Bassam of Brighton: moved Amendment No. 43:
	Page 110, line 19, after "the" insert "copy of the"

Lord Bassam of Brighton: My Lords, these amendments remove an anomaly brought about by the existing law and I ought to put on record my debt to the Charity Commission for the suggestion.
	Section 45 of the Charities Act 1993 requires all but the smallest registered charities to send their annual reports, their accounts and any report of an auditor or examiner to the Charity Commission each year. Section 46 of that Act also allows the commission to require some non-registered charities to send in these documents.
	I understand that, in practice, a large number of charities send the commission copies of the documents that I have referred to. Strictly speaking that fails to comply with the statutory requirement, which is for the actual documentation—not copies of it—to be sent in. A further anomaly is that the existing law also requires trustees to preserve their annual accounts for six years, which of course they cannot do if they comply with the requirement to send them to the commission.
	These amendments remove the requirement for charities to send in the originals of their documents and replace it with a requirement to send in copies. The amendments make the equivalent changes to the new group of accounts provisions. The amendments will also allow trustees to carry out their duty to preserve their annual accounts, since they will be retaining the originals while sending copies to the commission. Finally, they will require the trustees of a charity to preserve its annual report only if a copy of the report has not been required to be sent to the commission. I beg to move.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendments Nos. 44 to 46:
	Page 110, line 20, after "both" insert "a copy of"
	Page 110, line 38, after "the" insert "copy of the"
	Page 110, line 38, at end insert "a copy of"
	On Question, amendments agreed to.
	Schedule 7 [Charitable incorporated organisations]:

Lord Bassam of Brighton: moved Amendment No. 47:
	Page 118, line 22, at end insert—
	"69IA CONVERSION OF COMMUNITY INTEREST COMPANY
	(1) The Secretary of State may by regulations make provision for the conversion of a community interest company into a CIO, and for the CIO's registration as a charity.
	(2) The regulations may, in particular, apply, or apply with modifications specified in the regulations, or disapply, anything in sections 53 to 55 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 or in sections 69G to 69I above."

Lord Bassam of Brighton: My Lords, a community interest company, or CIC, is the new type of company introduced by statute in 2004. A CIC cannot, as we have discussed before, have charitable status, but it must carry on its activities for the benefit of the community.
	There would be no general objection to a CIC's seeking to become a charity. It may be, therefore, that some CICs would seek to become charities by converting to charitable incorporated organisation, or CIO, form. This amendment allows the Home Secretary to make regulations providing for CICs to convert directly to CIO form. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, could I just search out a little truth from the Minister? Subsection (2) of Amendment No. 47 proposes that regulations in the Charities Act will, or could, disapply Sections 53 to 55 of the Companies (Audit, Investigations and Community Enterprise) Act 2004. Am I right in assuming that it is a sort of cross-referencing where we will pick into another Act and change or disapply it? If so, that is the sort of maddening thing that makes legislation very complicated and difficult for people to understand because they do not realise that they have to reach across to another Act to find out that it no longer applies because it has been changed in an Act with which there is no immediate connection between charities and the Companies Act 2004. Have I got it right or am I being unduly paranoid?

Lord Bassam of Brighton: My Lords, any difficulty that might be experienced by a charity or a CIC or a CIO can be averted by providing charities in general with access to information about how this Act applies to other Acts. I have a feeling that at an earlier stage we discussed ways in which we could achieve some form of consolidation and I suspect that that may help as well. That is probably the answer to the noble Lord's point. It is incumbent on us to ensure that cross-referencing is easily understood and, as a general issue, I shall ensure that that is properly raised with the officials.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 48:
	Page 122, line 41, leave out "and registered societies" and insert ", registered societies and community interest companies"
	On Question, amendment agreed to.
	Schedule 8 [Minor and consequential amendments]:

Lord Bassam of Brighton: moved Amendment No. 49:
	Page 142, leave out lines 7 to 10 and insert—
	""(8) The Comptroller and Auditor General shall send to the Commission a copy of the accounts as certified by him together with his report on them.
	(9) The Commission shall publish and lay before Parliament a copy of the documents sent to it under subsection (8) above.""

Lord Bassam of Brighton: My Lords, the Official Custodian for Charities is currently an officer of the Charity Commission who acts as holder of certain charity assets. For example, when in the course of an investigation the commission concludes that charity assets are at sufficient risk to warrant their removal from the trustees who hold them, the commission may transfer them to the Official Custodian.
	The Official Custodian's accounts are examined and certified each year by the Comptroller and Auditor General. This minor amendment simply removes from the Comptroller and Auditor General and gives to the Charity Commission the task of laying the Official Custodian's accounts before Parliament. That is consistent with the Bill giving the commission the task of laying its own annual report before Parliament and, because of that, I think that this is an extremely good idea. I beg to move.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 50:
	Page 147, line 19, at end insert—
	"After section 19B (inserted by section 21 of this Act) insert—
	"19C COPY OF ORDER UNDER SECTION 18, 18A, 19A OR 19B, AND COMMISSION'S REASONS, TO BE SENT TO CHARITY
	(1) Where the Commission makes an order under section 18, 18A, 19A or 19B, it must send the documents mentioned in subsection (2) below—
	(a) to the charity concerned (if a body corporate), or
	(b) (if not) to each of the charity trustees.
	(2) The documents are—
	(a) a copy of the order, and
	(b) a statement of the Commission's reasons for making it.
	(3) The documents must be sent to the charity or charity trustees as soon as practicable after the making of the order.
	(4) The Commission need not, however, comply with subsection (3) above in relation to the documents, or (as the case may be) the statement of its reasons, if it considers that to do so—
	(a) would prejudice any inquiry or investigation, or
	(b) would not be in the interests of the charity;
	but, once the Commission considers that this is no longer the case, it must send the documents, or (as the case may be) the statement, to the charity or charity trustees as soon as practicable.
	(5) Nothing in this section requires any document to be sent to a person who cannot be found or who has no known address in the United Kingdom.
	(6) Any documents required to be sent to a person under this section may be sent to, or otherwise served on, that person in the same way as an order made by the Commission under this Act could be served on him in accordance with section 91 below.""

Lord Bassam of Brighton: My Lords, Amendment No. 50 is tabled in the name of my noble friend Lady Scotland. We have had several debates about the need to provide a copy of orders and the reasons for making orders in relation to particular protective powers of the commission. Most recently, we debated an amendment similar to this one on Report on 12 October. I think that it was Amendment No. 55, tabled by the noble Lord, Lord Phillips of Sudbury. During that debate, I said that the Government wanted to give the matter further thought and return with an amendment of their own covering the commission's protective powers under the Charities Act 1993.
	It is the commission's usual practice to inform trustees why it has taken any significant action using its protective powers. The amendment will make that a statutory requirement, subject to certain safeguards. It will require the commission to provide the trustees—or the charity, if a corporate body—with a copy of the order where it exercises a protective power under Section 18 and new Sections 18A, 19A, and 19B of the Charities Act 1993. It will also require the commission to provide a statement of reasons for making the order. However, the commission would not need to comply with this requirement—or not comply with it in relation to the statement of reasons—while it considered that to do so either would prejudice any inquiry or investigation or would not be in the interests of the charity.
	We are responding to an issue that was raised at an earlier stage by the noble Lord, Lord Phillips. I hope that noble Lords will welcome the amendment, and I beg to move.

Lord Phillips of Sudbury: My Lords, I am grateful for these amendments. They are in much the same form as those that I moved previously, and I think that they will prove very important for all charities affected by the orders concerned.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendments Nos. 51 to 57:
	Page 152, line 42, after "year"," insert—
	"( ) before "the annual report" insert "a copy of","
	Page 153, line 3, at end insert—
	"( ) before "the annual report" insert "a copy of","
	Page 153, line 8, leave out sub-paragraph (5) and insert—
	"(5) In subsection (4)—
	(a) for "annual report transmitted to the Commissioners" substitute "copy of an annual report transmitted to the Commission", and
	(b) before "the statement", and before "the account and statement", insert "a copy of".
	(5A) In subsection (5) before "annual report" insert "copy of an"."
	Page 153, line 9, at end insert—
	"( ) after "Any" insert "copy of an","
	Page 153, line 13, leave out sub-paragraph (7) and insert—
	"(7) In subsection (7) for the words from "which they have not" onwards substitute "of which they have not been required to transmit a copy to the Commission.""
	Page 153, line 41, leave out sub-paragraph (6) and insert—
	"(6) For subsection (7) substitute—
	"(7) The following provisions of section 45 above shall apply in relation to any report required to be prepared under subsection (5) above as if it were an annual report required to be prepared under subsection (1) of that section—
	(a) subsection (3), with the omission of the words preceding "a copy of the annual report", and
	(b) subsections (4) to (6).""
	Page 154, leave out lines 2 and 3 and insert—
	"(a) for "Any annual report or other document kept by the Commissioners" substitute "Any document kept by the Commission", and"
	On Question, amendments agreed to.
	Schedule 9 [Repeals and Revocation]:

Lord Bassam of Brighton: moved Amendments Nos. 58 and 59:
	Page 167, line 14, column 2, leave out "29(8)" and insert "29(7) and (8)"
	Page 167, line 22, at end insert—
	
		
			  
			 "Intervention Board for Agricultural Produce (Abolition) Regulations 2001 (S.I. 2001/3686) Regulation 6(11)(a)." 
		
	
	On Question, amendments agreed to.
	An amendment (privilege) made.

Lord Bassam of Brighton: My Lords, I beg to move that this Bill do now pass. I ought to put on record a few thanks. Prior to today's deliberations, we had debated the Bill for no fewer than 57 hours, so my guess is that we have topped 60 since it was first introduced in another place in December 2004.
	I thank in particular the noble Lord, Lord Hodgson of Astley Abbotts, and the noble Lord, Lord Phillips of Sudbury, for one of the most thorough and constructive considerations of a piece of legislation I have ever had any connection with in your Lordships' House. Although he is not here, I thank the noble Lord, Lord Swinfen, for his persistent and telling approaches. I did not always agree with them, but he none the less did good service and stayed the course.
	The noble Lord, Lord Sainsbury of Preston Candover, played an important part. The noble Lord, Lord Campbell-Savours, made an interesting series of interventions. I can even remember the noble Lord, Lord Wedderburn of Charlton, keeping us entertained for some hours in the early stages of Committee. At that stage, I almost gave up the will to live. I did not mean that, but I am sure noble Lords understand what I mean. Back-Benchers have played a commendably important role in the Bill, and I express my gratitude to them.
	I also thank the charities that have become involved in the process. Their advice to Members from all parts of the House has been helpful. Some amendments would not otherwise have found their way on to the statute book without them. There are also one or two individuals who petitioned us for particular things, showed some powerful insight into the operation of the law and enabled us to make some constructive changes. Bodies that represent charities and their interests, particularly the Charity Law Association, are owed a debt of gratitude. I am most grateful to them for their rigorous critical thinking and sensitive, informed approach to the Bill.
	Finally, I thank my colleagues in the Whips' Office for putting up with my grumpy nature and occasional ill humour as I have had to go through the Bill in great detail over such a long time. Of course, we all ought to thank the officials who have serviced these debates. The Bill team has been magnificent, and the collaborative work between it and the Charity Commission has enabled us to solve some problems that otherwise might not have reached a friendly and intelligent resolution. So, to all those parties, I say a big thanks. It has been a pleasure, and I hope that the Bill now finds favour in another place.
	Moved, That the Bill do now pass.—(Lord Bassam of Brighton.)

Lord Phillips of Sudbury: My Lords, I thank the Minister for his kind words and endorse all the thanks that he proffered. It would be remiss, however, not to thank him. It has been a very heavy load—60 hours, as he says—and I think the Minister has been responsible for about 58 of those. I commend him and the noble Lord, Lord Hodgson of Astley Abbotts. Neither of them are lawyers.

Lord Hodgson of Astley Abbotts: Sadly.

Lord Phillips of Sudbury: My Lords, they should both be very relieved not to be lawyers. However, they have got their heads around the ineffable complexities of this legislation in a remarkable way. Without that commitment, I am sure, we would not have got to where we have in the manner in which we have.
	I, too, give my personal thanks to the Bill team and the Charity Commission team. Both have been at all times open, helpful and ready to discuss and surmount many of the problems that we have faced along the way. My greatest gratitude to them. I also mention, en passant, NCVO, which has put a lot of work into this Bill; the Law Society; and one must not forget, although one might, the Association of Charitable Trusts, which has been dogged, if ever that word had meaning; and particularly Judith Hill at the Charity Law Association, who has been the generalissimo of its terrific efforts.
	I thank the Minister again for what he said and all Members of the House for making this a model consideration of a difficult measure.

Lord Hodgson of Astley Abbotts: My Lords, I add my sincere thanks to the Minister for all that he has done and for his patience. It seems a long time since we started. The Second Reading of the Bill in its original form was on Thursday 20 January, so I am not surprised that there have been 60 hours of debate. I thank the noble Lord, Lord Phillips, who kept me on the straight and narrow from a legal point of view. I also thank the Bill team and the Charity Commission. I felt that we would never get to a position where there were fewer than 100 amendments on the Marshalled List. We got down to 59 today, which was a big advance.
	Those of us who want to keep legislation short should remember that we have managed to expand the Bill from 72 to 78 clauses and from 129 to 172 pages. That is the result of our efforts, so we have not been as good at holding down the size of the legislation, but I am sure that, thanks to the work of the Minister, the Bill team, Members of the House and outside advisers, the Bill is a very much better piece of legislation. As we wave the Bill goodbye, I express the hope, in the nicest possible way, that we never have to see it again.
	On Question, Bill passed, and sent to the Commons.

House adjourned at twenty-two minutes past nine o'clock.